Foreign portfolio investors (FPIs) have invested ₹8,643 crore in Indian equities markets so far this month. FPIs infused a net sum of ₹7,936 crore in equities in March, mainly driven by bulk investment in Adani Group companies by the US-based GQG Partners, PTI reported.
"The valuation of Indian equities has come to a reasonable level following its consolidation, which prompted FPIs to invest in Indian stocks," Himanshu Srivastava, Associate Director - Manager Research, was quoted as saying in the report.
Another market expert believes that valuations have become more palatable given the almost zero NSE 50 returns over the last 17–18 months, the report said.
In terms of sectors, FPIs heavily bought financial stocks for ₹4,410 crore during the fortnight that ended April 15. Besides, they were also buyers of automobiles and capital goods. In addition, IT stocks too saw buying interest, although marginally.
"There were huge delivery volumes in stocks like HDFC Bank, HDFC, and Tata Motors during the fortnight. It can be safely assumed that the bulk of this delivery buying was done by FPIs. FPIs have also increased their holding in ITC," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, as cited in the report.
Stocks in which FPI holdings are steadily rising are showing resilience even during market weakness.
"FPI inflows are likely to remain stable going forward. Financials will continue to attract more inflows since the early Q4 results of the segment are very good," Vijayakumar added.
Overall, FPIs had pulled out a net sum of ₹37,631 crore from Indian equities in 2022–23 on aggressive rate hikes by central banks globally and a record ₹1.4 lakh crore in 2021–22. Before these outflows, FPIs invested a record ₹2.7 lakh crore in equities in 2020–21 and ₹6,152 crore in 2019–20, the report noted.
In the financial year 2022–23, most of the major central banks started hiking the interest rate, which resulted in the departure of hot money from emerging markets, including India. This resulted in an unprecedented rise in prices (inflation) in most economies.
Apart from global monetary tightening, volatile crude and rising commodity prices, along with Russia and Ukraine conflict, led to an exodus of foreign money in 2022–23, added the report.
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