The investment made by foreign portfolio investors (FPI) in the domestic equity market in March 2016 is their biggest monthly investment in last 34 months.

Markets pundits said the attractive valuations commanded by Indian markets after a steep slide in the past few months and improvement in global risk appetite amidst a softening of its stand by the on further interest rate hike US Federal Reserve helped India attract a major chunk of foreign portfolio money.

In March 2016, they bou-ght shares worth Rs 21,143 crore, their biggest mont-hly purchase since March 2013. Even during May 2014, when the Lok Sabha election result was annou-nced they gave a thumping majority to the Nar-endra Modi led BJP, inve-stments made by overseas investors were much lower at Rs 14,006 crore.

“There was a significant outflow of funds during the first two months of this year amidst steep fall in commodity prices and a fear about an interest rate hike by the US Federal Reserve. However, in March, there was a general improvement in global risk appetite after US Federal Reserve hinted about a gradual and cautious approach with regards to future rate hike moves. Indian equity markets benefited, as valuations were looking quite attractive,” said Sudip Bandyopadhyay, chief executive officer, Destimoney Securities.

During January and February 2016, FPIs offlo-aded shares worth Rs 16,647 crore.

On the domestic side, Mr Bandyopadhyay said the progress of monsoon; corporate earnings growth and interest rate cut by RBI would influence the market sentiments going forward.

Market participants are expecting a 25 basis point reduction in the repo rate by Reserve Bank of India in its upcoming monetary policy meeting.