Foreign portfolio investment
Also called: FPI, FPIs, FII, foreign institutional investors
Investment by foreign investors in listed shares, bonds and similar securities, which can be bought and sold quickly.
Portfolio flows react to global interest rates, the dollar, risk appetite and changes in global index weights, as well as to Indian conditions. Net foreign selling means others, such as domestic institutions and individuals, were net buyers. Daily figures are provisional and noisy, and foreign investors often follow prices rather than lead them.
Example
If an index rises 10% in rupees while the rupee falls 5%, a dollar-based investor earns about 1.10 × 0.95 − 1, or 4.5%.
Learn more in these lessons
- Foreign investment flowsDo foreign investors move the Indian market, and should you follow them?
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