business News: Foreign portfolio investors (FPIs) bought equity worth Rs 18,617 crore in the month of May. There is a distinct shift in the FPI strategy with a clear tilt in favor of India, said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
In the first three months of 2023, FPIs were consistent sellers in India due to India’s premium valuation and China’s reopening opportunities and relatively lower valuations in South Korea, Hong Kong and Taiwan. Vijayakumar said that phase is now over and India has once again become a preferred emerging market destination for FPIs.
FPIs have remained consistent buyers during the last 12 trading sessions. He bought equity worth Rs 18,617 crore through the 12th in May. The financial sector continues to be the preferred sector for FPIs. He was also a buyer of capital goods and autos.
Vijayakumar said since the rupee is strong and the dollar is expected to depreciate in the near future, FPIs are likely to continue buying in India. Improvement in India’s macros also supports continued flows into India. Foreign portfolio investors became aggressive buyers in the last days of April.
FPIs have bought equity worth Rs 9,752 crore till April 29. The monthly economic review for March, released by the Union finance ministry, stated that the narrowing of the CAD, resulting in increased foreign portfolio investment (FPI) inflows, has led to an increase in foreign exchange. Stocks up to the end of Q3 of 2022-23.
With further accretion to foreign exchange reserves by the end of 2022-23, prospects for further easing of the CAD in Q4:2022-23 are bright. Even as external stability strengthened, factors contributing to internal stability also improved.
The document states that fiscal parameters for the Center and states in 2022-23 remain robust, as seen in solid revenue generation and improvement in the quality of expenditure.
(With IANS inputs)
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