Another major factor pushing the markets higher was the massive inflow of foreign institutional investments (FII) which flocked towards India amid zero or nil interest rates in major economies including the US and European countries.
India received FIIs of around $22.5 billion or Rs 1.7 lakh crore in equities in 2020. Net FII inflow so far this month stands at Rs 20,098.53 crore.
The Net inflow of foreign portfolio investment (FPI) so far in the current financial year stood at over Rs 2.38 lakh crore, according to NSDL data. This is the highest FPI inflow ever in a fiscal.
Contrary to the enthusiastic participation of foreign investors, the domestic institutional investors (DII) have been wary of the Indian stock market and continuously pulled out investments amid the pandemic. In FY21, DIIs recorded their first net outflow in fiver year. Net DII outflow in this fiscal stands at over $4.9 billion so far.