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Foreign investors pour in Rs 7,714 crore into capital markets in September

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New Delhi: After remaining net sellers for the past two months, foreign investors infused a net Rs 7,714 crore into the domestic capital markets in September following a slew of economic reforms by the government. The Centre last week slashed corporate tax rate by around 10 percentage points and also clarified that the enhanced tax surcharge will not apply on capital gains arising from sale of any security, including derivatives, in the hands of foreign portfolio investors (FPIs). Besides, the Securities and Exchange Board of India (Sebi) simplified KYC requirements for FPIs and granted them permission to carry out off-market transfer of securities. As per latest depositories data, FPIs poured in a net Rs 7,849.89 crore into equities and withdrew a net Rs 135.59 crore from the debt segment between September 3-27, translating into a cumulative net inflow of Rs 7,714.30 crore. Prior to this, foreign investors had pulled out a net Rs 5,920.02 crore in August and Rs 2,985.88 crore in July from the domestic capital markets (both equity and debt). "The government has initiated many reforms to embrace the FPIs in the home country by way of abolishing additional surcharge on the capital gains to slashing the corporate tax rates to attract new foreign investment. "If everything kept constant, the corporate tax cut is itself a very strong factor that will lead to earnings upgrades and will bring valuations to an attractive level which will eventually lead to historic FPI buying again," said Foram Parekh, fundamental analyst at Indiabulls Ventures. Reacting to Sebi's reforms, V K Vijayakumar, chief investment strategist at Geojit Financial Services, said, "The simplification of KYC requirements for FPIs, permission for off-market transfer of securities, simplification of registration process and the new broad classification of FPIs are welcome and desirable steps." However, FPI inflows into India will also be influenced by how the economy performs and how soon corporate earnings recover, Vijayakumar added.

The US Fed's monetary stance and global liquidity are also crucial in determining FPI flows, he said. Besides, the cooling of the US-China trade war is also helping investors' sentiments, said Harsh Jain, COO and co-founder of Groww.

Top Weekly Recommendations29 Sep, 2019Benchmark equity indices BSE Sensex and NSE Nifty registered their biggest weekly gains in four months for the week ended September 27.

Investor sentiment remained upbeat in equity market after FM Nirmala Sitharaman last Friday said that India has become a highly competitive investment destination post corporate tax reduction as the rates are now lower than that in China and most Southeast Asian countries.Here are four stocks that could prove good trading plays this week:SBI Life Insurance | Buy above: Rs 842 | Target Price: Rs 88529 Sep, 2019The stock suffered a mild corrective decline after it marked its high.

The price took support at the 50-DMA, and a couple of signs have emerged which point towards likely resumption of an up move.

The PPO has turned positive while MACD has shown a positive crossover.

It is now bullish and trades above its signal line.

While the stock price is yet to mark a fresh high, the OBV—On Balance Volume has already set a new high.

The RS line, when compared against the broader markets appears to be moving higher, and it has also penetrated its 50-DMA.

Any close below 850 should be treated as a stop-loss for this trade.

​Can Fin Homes | Sell Below: Rs 404 | Target Price: Rs 37529 Sep, 2019After grossly underperforming the broader markets, the stock is showing signs of some possible retracement from current levels.

It failed to break above the 424-levels.

A clear bearish divergence is observed on RSI; the price was marking higher tops while the RSI made lower tops during the same time-frame.

The MACD is sharply moving towards creating a negative crossover.

The RS Line appears to be reversing its trend, and it is above to breach its 50-DMA on the downside.

Any Close above the 420 levels should be treated as a stop-loss for this trade.

​Britannia Industries | Sell Below: Rs 3,015 | Target Price: Rs 2,85029 Sep, 2019The stock is showing few signs of exhaustion and may show some corrective moves.

The level of 3115 is an crucial resistance going ahead.

After a steep up-move over the past couple of days, the stock has pulled itself inside the Bollinger band.

The RSI has just crossed under 70 from the overbought zone, and this is a bearish sign.

The price action has created a gap near the 200-DMA area, and this gap is expected to get filled.

Any close above the 3115 levels should be treated as a stop-loss of this trade.

​Maruti Suzuki | Sell Below: Rs 6,775 | Target Price: Rs 6,35029 Sep, 2019The stock participated in the general up move that was seen last week, but the price halted its upside just below the 7200 levels.

The stock has presently pulled itself inside the upper Bollinger band.

The price action has also resulted in a sharp bearish divergence with the RSI.

While the price marked higher top, the RSI did not mark any higher top and stayed below its pattern resistance levels.

This shows lack of strength in the up move.

The current technical setup shows that the retracement may continue over the coming days.

Any close above the 7000 levels should be treated as a stop-loss for this trade.




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