Foreign portfolio investors (FPIs) started February on a positive note but took a U-turn on weak global cues and continued January’s selling streak in Indian markets. According to market experts, FPIs continue buying in primary markets and debt, counterbalanced the total net sell-off amount so far in February. However, the capital outflow by FPIs stands at ₹29,520 crore so far in 2024.
FPIs have sold ₹3,776 crore worth of Indian equities and the total inflow stands at ₹19,608 crore as of February 16, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL) data.
Foreign institutional investors (FIIs) were buyers for three out of five sessions last week, yet the total divestment stood at ₹6,240.55 crore, while domestic institutional investors (DIIs) were buyers for all five sessions, with a total investment of ₹8,731.6 crore, according to stock exchange data. On a monthly basis, FIIs have sold shares in Indian markets to the tune of Rs. 14,171 crore between February 1-16, 2024.
“The spike in US bond yields triggered by the higher-than-expected consumer price inflation led to sustained selling by FPIs in the cash market. In February through 16th, FPIs had sold equity worth ₹6,112 crore through the exchange. But, buying through ‘the primary market and others’ reduces the net sell figure for February through 16th to ₹3,775 crore,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
FPI activity in Indian markets
FPIs turned massive sellers in January 2024 snapping their buying streak as investments saw a sharp uptick in December 2023 after they reversed their three-month selling streak in November 2023.
However, inflow intensified in December on strong global cues after the US Federal Reserve signalled the end of its tightening cycle and raised expectations of a rate cut in March 2024. This led to a crash in US bond yields and triggered foreign fund inflows into emerging markets like India.
For the entire calendar year 2023, FPIs bought ₹1.71 lakh crore in Indian equities and the total inflow stands at ₹2.37 lakh crore taking into account debt, hybrid, debt-VRR, and equities, according to NSDL data. FPIs’ net investment in Indian debt market stands at ₹68,663 crore during 2023.
FPI inflows into Indian equities during November 2023 stood at ₹9,001 crore, compared to over ₹39,000 crore worth of shares sold in September and October together, according to NSDL data. Taking into account debt, hybrid, debt-VRR, and equities, FPI inflows were at ₹24,546 crore during the month.
Overall, only four months in 2023–January, February, September, and October- saw net FPI outflows from Indian equities. May, June, and July each recorded FPI inflows above ₹43,800 crore.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 17 Feb 2024, 04:53 PM IST