Sensex FPI Inflow and the Future of Indian Equities: Aiming for 1,00,000
Sensex FPI Inflow: A Catalyst for Indian Equities
Of late, the Indian markets have been scaling fresh heights, with Sensex recently inching past the 85k mark. Currently trading at 85,571.85 points, can the benchmark index cross the 6-figure, 1,00,000 mark in early 2025?As data suggests, foreign investors have poured Rs 57,359 crore into Indian equities in September 2024, making it the highest inflow in nine months, surpassing the Rs 1 lakh crore mark in 2024.
Driving Factors Behind the Surge
- This figure was the highest since December 2023, when FPIs had invested Rs 66,135 crore in equities.
- Driven by a 50-bps rate cut by the US Federal Reserve this month, significantly boosting liquidity in Indian markets.
- Domestic markets remain resilient, supported by a robust line-up of IPOs and strong confidence from domestic investors.
The Role of RBI in Market Stability
Key decisions by the RBI in the upcoming months regarding inflation management and liquidity will be crucial in sustaining this growth, noted Robin Arya, Smallcase Manager and CEO of GoalsFi.
Long-Term Performance: Sensex's Historical Returns
The markets have been on a roll, with data indicating that the Sensex has given returns worth 850x to investors in the last 45 years, translating to a CAGR of 16%. Simply put, an investment of Rs 5,000 in 1979 would be worth an astounding Rs 39 lakh today.
Current Returns and Future Outlook
Recently, Sensex delivered returns of 30.62%. Despite this strong momentum, many experts predict it is unlikely to breach the 1L mark anytime soon next year. However, some analysts suggest a possibility of hitting 1,00,000 by Diwali 2025 or the end of 2026, provided India avoids major economic shocks.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.