Foreign portfolio investors (FPIs) have sharply positive in December and finally having reversed their selling streak in November, emerging net buyers in the Indian stock market. The inflow has intensified 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.
FPIs have bought ₹57,313 crore worth of Indian equities and the total inflow stands at ₹77,388 crore as of December 22, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL) data. FPIs heavily bought stocks in banking and IT segments, according to analysts.
“FPI inflows which were negative in the previous 3 months have sharply turned positive in December. Total FPI inflows in December through 22nd is ₹57,313 crores including the buying through stock exchanges and primary market. The steady decline in US bond yields have caused this sudden change in the strategy of FPIs,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
FPI activity in Indian markets
FPIs were net sellers in August, September and October on a sharp spike in US bond yields amid ongoing geopolitical tensions in the Middle East. FPIs were net buyers till November 15, but reversed the selling trend and invested on November 15 and 16. During August, September October and till November 15, FPIs cumulatively sold stocks for ₹83,422 crore through the exchanges.
FPI inflows into Indian equities during November 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.
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Published: 23 Dec 2023, 04:43 PM IST