Stock Market Updates: Foreign portfolio investors (FPIs) are playing a significant role in the Indian market as they remained buyers of Indian equities in May, infusing Rs 10,850 crore in the last four trading sessions. FPIs are showing a lot of interest in Indian equities due to stable macroeconomic environment, strong GST collections and better than expected corporate quarterly earnings in the country.
March’s investment was mainly driven by bulk investment in Adani group companies
This came after a net infusion of Rs 11,630 crore in equities in April and Rs 7,936 crore in March, data available with depositories showed. The March investment was mainly driven by US-based GQG Partners’ bulk investment in Adani group companies. However, if one adjusts for GQG’s investment in the Adani Group, the net inflow is negative.
Going forward, strengthening rupee and good fourth quarter results will help increase capital inflows into India, said VK Vijayakumar, chief investment strategist at Geojit Financial Services. According to depository data, FPIs invested a net Rs 10,850 crore in Indian equities in the last four trading sessions during May 2-5.
FPIs will be drawn to Indian stocks by the country’s stable macroeconomic environment
“FPIs will be attracted to Indian stocks due to the country’s stable macroeconomic environment, strong GST collection data and better-than-expected corporate results,” said Himanshu Srivastava, Associate Director-Manager Research, Morningstar India.
Furthermore, recent market volatility and sporadic correction, as well as the stability of the global financial system, improved investor sentiment, leading to an uptick in inflows.
Geojit’s Vijayakumar said India outperformed most markets in April. The main reason for the better performance is the continued buying by FPIs. On the other hand, FPIs pulled out Rs 2,460 crore from the debt market during the period under review.
FPIs were big sellers in IT
With regard to sectors, FPIs made large purchases in financial services and continued to buy capital goods in the second half of April. However, he was a big seller in IT. So far this year, FPIs have pulled out Rs 3,430 crore from equities and invested Rs 1,808 crore in the debt market.