Mumbai: The investment made by FPIs in the domestic equity markets, which has turned positive for the last few days, is likely to gain further momentum going forward as Indian dedicated equity funds have started receiving fresh inflows from global investors.

After remaining major sellers during the last quarter of 2016 and most part of January, overseas investors had slowly started building a fresh position in domestic equities just ahead of the Budget.

According to Emerging Portfolio Fund Research (EPFR) Global, the India-focused equity funds posted their biggest inflow in over eighteen months despite the broader Asia ex-Japan equity funds seeing net outflows in late January.

“Investors responded positively to ongoing reforms, the country’s relatively low dependence on external trade and expectations that the government would respond to slowing growth by loosening fiscal policy. India’s government met those expectations, unveiling a 2017-18 Budget that cuts taxes, boosts spending on infrastructure and eases deficit targets,” EPFR said.