scorecardresearchForeign investors turn net buyers in April so far; invest <span class='webrupee'>₹</span>7,707 crore in Indian equities

Foreign investors turn net buyers in April so far; invest 7,707 crore in Indian equities

Updated: 11 Apr 2022, 09:04 AM IST
TL;DR.

Apart from equities, FPIs put in 1,403 crore in the debt markets.

Foreign investors have turned into net buyers in April.

Foreign investors have turned into net buyers in April.

Following a six-month selling spree, foreign investors have turned into net buyers in April, infusing 7,707 crore in Indian shares as a market downturn gave them a decent purchasing chance.

According to the most recent depositories data, foreign portfolio investors (FPIs) made a net investment of 7,707 crore in Indian equities between April 1 and April 8.

However, they were net sellers in the previous two trading sessions, indicating that there is still uncertainty about the direction of FPI flows.

The latest inflow follows large net outflows from stocks of 1.48 lakh crore in the six months from October 2021 to March 2022.

These were mostly attributable to expectations of a rate hike by the US Federal Reserve, as well as the worsening geopolitical environment following Russia's invasion of Ukraine.

Apart from equities, FPIs put in 1,403 crore in the debt markets during the period under review, after pulling out a net 8,705 crore in the last two months (February and March).

FPI flows are projected to remain erratic in the near term, according to Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities, due to headwinds such as rising petroleum prices and inflation.

Upside AI founder Atanuu Agarrwal said inflation is at multi-decade highs in the US and Europe, and consistently above RBI's tolerance limit here at home.

FPIs withdrew a total of 1.4 lakh crore from stocks in FY 22. Despite the pullback, the NSE Nifty increased 19% in the same period, thanks to domestic institutional and individual investor backing.

However, if this trend continues, there might be limited capacity to absorb further liquidation at current price levels, Agarrwal added.

Article
Foreign portfolio investors (FPIs) have been on a selling spree in the Indian market, exceeding the global financial crisis (GFC) outflow of 2008-09. However, the market benchmark Sensex has not reacted to the FPI selling as it used to in the past. Data from NSDL show that FPIs have sold equities worth 1,41,507 crore in the Indian equities in the financial year 2022 (FY22) so far. Cumulatively, they have withdrawn 1,19,950 crore from the Indian financial market instruments, which includes equities, debt, debt-VRR (voluntary retention route) and hybrid category. The data show, FPIs have sold only equities and bought in debt, debt-VRR and hybrid categories in FY22 so far.
First Published: 11 Apr 2022, 09:04 AM IST