DNH Financial said yesterday there has been a significant pick up in net foreign purchases and this augurs well for the stock market as well as the economy overall.
“Net foreign buying has positively surprised rising to Rs. 27 billion on an YTD basis. Encouraged by a weaker Rupee and healthy corporate results in select blue-chip stocks, foreign portfolio investors appear to be cherry picking fundamentally strong value and growth stocks that are likely to outperform on a consistent basis with relatively lower earnings and price volatility,” DNH said.
Taking into consideration the medium to longer term investment horizon of FIIs, DNH believes that foreign buying in domestic equities will accelerate this year, but on a highly selective basis encouraged by a weak rupee and positive growth prospects for the Bourse.
“Although we view investment opportunities mainly from a bottom-up perspective, at a macro level, we expect economic growth to continue notwithstanding our expectation of a rise in inflationary pressures due to cost push factors caused by the rupee depreciation and high oil prices, which will impact the balance of payments,” DNH Financial added.