In March, foreign portfolio investors, or FPIs, maintained their purchasing streak and became consistent purchasers in the Indian markets. Foreign investors, who had been significant sellers in January, continued the modest trend they had begun in February. Market analysts emphasized that this month, FPIs made some bulk investments through the stock markets.
According to data from the National Securities Depository Ltd (NSDL), FPIs purchased Indian shares for ₹40, 710 crore, bringing the overall inflow to ₹50,471 crore as of March 15. This figure includes debt, hybrid, debt-VRR, and equity.
“The trend of rising foreign portfolio investment in India witnessed in the first week of March continued in the second week, too. FPIs were big sellers in January and modest buyers in February,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
FIIs and DIIs data
In the Indian markets last week, foreign institutional investors (FIIs) were net sellers as withdrawals exceeded net investments, ending a four-week surge in the stock market and marking the weakest week in more than four months.
According to stock market data, while DIIs were purchasers for every session this week, with a total investment of ₹14,147.5 crore.
Will the inflows continue in the foreseeable future?
Macroeconomic reasons such as the upcoming general elections and big corporations reporting strong results and reasonable valuations will propel India to the top of the list of rising markets to watch in the world for the next two to three years, according to market analysts.
Dr. V K Vijayakumar did point out that one significant aspect of FPI investing has been its volatility for a number of months.
’Now that US bond yields have again spiked up in response to stubborn inflation, FPIs may again turn sellers in some of the days, going forward,” stated Dr. V K Vijayakumar.
‘’An important trend in the market in March is the weakness in the mid and smallcaps and the resilience in largecaps. This also has persuaded FPIs to reduce selling in largecaps and even buying in limited quantities in sectors like banking, telecom and automobiles,” continued the analyst.
FPI status
In February, investments in Indian shares totaled ₹1,539 crore, while debt market investments increased to ₹22,419 crore.
In particular, foreign fund inflows into the debt markets were sparked by the inclusion of government bonds in the JPMorgan and Bloomberg debt indices. FPIs broke their buying run in January 2024, selling heavily after investments saw a strong increase in December 2023.
On the other hand, December saw a sharp increase in inflow following the US Federal Reserve’s announcement that its tightening cycle was coming to an end. Due to this, US bond yields fell precipitously, and international capital began pouring into developing nations like India.
Note: The opinions and suggestions expressed above are those of specific analysts or broking firms. Before making any financial decisions, we suggest investors to consult with qualified specialists.
