FPIs turned net buyers for the first time in July after nine straight months of massive net outflows, which started in October last year. Between October 2021 till June 2022, they sold a mammoth Rs 2.46 lakh crore in the Indian equity markets.
Foreign investors have converted into net buyers and bought almost 5,000 crores in Indian shares in July on the back of a weakening dollar index and solid corporate profits.
This comes after nine consecutive months of continuous selling by foreign investors.
This starkly contrasts the stock market’s net withdrawal of Rs 50,145 crore in June.
According to statistics obtained from depositories, this was the largest net outflow seen since March 2020, when foreign portfolio investors (FPIs) had withdrawn Rs 61,973 crore from equity markets.
The increase in the amount of money coming into the market helped push share prices higher.
After nine consecutive months of large net outflows that began in October last year, foreign portfolio investors (FPIs) were net buys for the first time in July.
They made a staggering 2.46 trillion rupees worth of sales in the Indian equities markets between October 2021 and June 2022.
According to Himanshu Srivastava, Associate Director – Manager Morningstar India, the US Federal Reserve Chairman Jerome Powell’s statement that the US is not currently experiencing a recession helped enhance emotions and risk appetite globally in July.
Hitesh Jain, the Lead Analyst – Institutional Equities at Yes Securities, anticipates that FPI inflows would continue positive for August, as the worst for the rupee seems to have passed and the price of oil appears to be contained within a range.
“Also, the outlook for profitability remains positive, as robust sales growth is balancing the decline in profit margins,” he said.
According to statistics from depositories, foreign portfolio investors invested a net sum of Rs 4,989 crore in Indian stocks in July. Nine days of the month were spent as purchasers.
The net influx pulled the equities markets higher as well.
After nine consecutive months of large net outflows beginning in October of last year, foreign portfolio investors were net purchases for the first time in July.
Between October 2021 and June 2022, they sold an enormous Rs 2.46 trillion on the Indian equities markets.
Additionally, the net inflow boosted the equities markets upward.
After nine consecutive months of large net outflows beginning in October of last year, foreign portfolio investors were net purchases for the first time in July.
Between October 2021 and June 2022, they sold an enormous Rs 2.46 trillion on the Indian equities markets.
Furthermore, the recent fall in the Indian equity markets has offered a favorable buying opportunity, which FPIs have taken advantage of by investing in high-quality companies.
However, FPIs withdrew a net sum of Rs 2,056 crore from the debt market during the month under review.
According to Srivastava, this reversal in net outflows cannot be seen as a trend reversal or as FPIs making a full return.
Although it is a good turn on the part of foreign investors, the situation continues to change rapidly, and it may take some time for clarity to emerge.
Srivastava says that this change in net outflows cannot be seen as a change in the overall trend or as proof that FPIs have made a full comeback.
Although this is a good turn by foreign investors, the situation continues to change rapidly, and it may take some time for clarity to emerge.
The flows have also been substantially influenced by short-term tendencies. Thus, we have yet to witness long-term funds.
