FPIs have invested Rs 3,200 Cr in Indian equities: Foreign Portfolio Investors have invested more than Rs 3,200 crore in Indian shares so far this month as a result of market volatility worldwide, economic worries in China, and local economic stability.
“Since the markets have rallied smartly during the last three months, some profit booking by FPIs would be rational and can be expected, “VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
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“Any decline in global stocks could cause wild fluctuations in local shares and result in FPI flow being choppy in the future as the global economic climate becomes more problematic due to weakening Chinese demand“ expert said
According to the data with the depositories, Foreign Portfolio Investors (FPIs) have put in a net sum of Rs 3,272 crore in Indian equities from August 1-11.
However, in the first week of August, FPIs took a breather and pulled out over Rs 2,000 crore from equities.
“The uncertainty in the global markets and economic concerns in China again played a role in FPIs shifting their focus back toward Indian markets, which have been more resilient and stable, Also better-than-expected earnings season for the June quarter lent positive support to the sentiments,” expert said
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The June quarter results have decreased the market’s price-to-earnings (PE) ratio despite increased stock prices. FPIs are given value assurance by this attractive PE ratio, which is supported by solid company performance.
Additionally, the relative stability in the Indian Treasury rates, in contrast to the volatility observed in the US 10-year rates, enhances India’s appeal for FPIs
Prior to August, Indian stocks saw a continuous net inflow during the previous five months, from March to July, due to the country’s economy’s recovery in the face of an unstable global macroeconomic environment. Moreover, in the past three months (May, June, and July), FPIs made investments totaling more than Rs 40,000 crore each.
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The net inflow was Rs 46,618 crore in July, Rs 47,148 crore in June, and Rs 43,838 crore in May. Before March, overseas investors pulled out Rs 34,626 crore collectively in January and February.
Apart from equities, FPIs invested Rs 2,860 crore in the debt market during the period under review. With this, inflow in the equity market reached Rs 1.26 lakh crore, and the same for debt was at Rs 23,300 crore so far this year, data with the depositories showed.
FPIs continued to be purchasers in the financial, capital goods, and IT sectors, as well as other subsectors, on a selective basis. Strong domestic institutional investors (DIIs) buying offsets FPI selling, which is a notable market trend.
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