scorecardresearchFPI buying streak signals more upside for Indian equities: Report

FPI buying streak signals more upside for Indian equities: Report

Updated: 18 Aug 2022, 10:13 AM IST
TL;DR.

There have been 43 other instances of such double-digit stretches of foreign portfolio investor (FPI) buying over the past five years, and in 95 percent of those cases, the benchmark was up after an additional 60 days — with an average gain of 9 percent.

There have been 43 other instances of such double-digit stretches of foreign portfolio investor (FPI) buying over the past five years, and in 95 percent of those cases, the benchmark was up after an additional 60 days — with an average gain of 9 percent.

There have been 43 other instances of such double-digit stretches of foreign portfolio investor (FPI) buying over the past five years, and in 95 percent of those cases, the benchmark was up after an additional 60 days — with an average gain of 9 percent.

Domestic equity markets reached a 10-day streak of net foreign fund inflows on August 11, which has helped the NSE Nifty50 Index return to positive territory for the year, a report by Business Standard pointed out.

According to the report, the burst may be a signal for investors to keep buying stocks.

"There have been 43 other instances of such double-digit stretches of foreign portfolio investor (FPI) buying over the past five years, and in 95 percent of those cases, the benchmark was up after an additional 60 days — with an average gain of 9 percent," informed BS.

The average 20-day and 10-day gain after a double-digit stretch of buying is 2.7 percent and 1.4 percent, respectively, BS highlighted quoting Bloomberg. On occasions the market gained, following a sustained bout of FPI buying, is 9.5 percent over a 60-day period, it added.

On the other hand, the average losing return after such a bout is just an average of 3.4 percent, noted the report.

FPIs turned net buyers of Indian equities on a calendar month basis last month for the first time since October 2021. After turning net buyers last month, foreign investors have become aggressive shoppers of Indian equities and have invested 22,452 crore in the first two weeks of August amid softening inflation concerns.

This was way higher than a net investment of nearly 5,000 crore by Foreign Portfolio Investors (FPIs) in the entire month of July, data with depositories showed.

Between October 2021 till June 2022, FPIs sold 2.46 lakh crore in the Indian equity markets.

Going forward, foreign fund inflow is expected to improve in the emerging markets on account of fading concerns of rising inflation and tightening of monetary policy by central banks, Shrikant Chouhan, Head - Equity Research (Retail), Kotak Securities, said.

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: 18 Aug 2022, 10:13 AM IST