Foreign institutional investors (FIIs) seem to be regaining confidence in the Indian markets, something that was lacking during the earlier part of this calendar year. On a net basis, FIIs infused ₹22,585 crore in Indian equities via the stock exchanges in 14 sessions between April 26 and May 16, as reported by Financial Express, citing data from CDSL.
Both benchmark indices gained 3% between April 26 and May 16, with the Sensex jumping 1,800 points and the Nifty 50 by 517.
This run is equivalent to another 14-day run last year that saw ₹52,464 crore ($6.6 billion) coming in between July 28 and August 19, 2022, said the report.
What makes this impressive is that this is the longest streak of FII inflows in two and a half years — the last being a 19-day streak from November 26 to December 23, 2020, that saw the influx of ₹59,645 crore ($8.1 billion), the report highlighted.
Analysts say that in the earlier part of the year, foreign investors were spooked by unfavourable valuations and the turmoil in Adani Group stocks following the Hindenburg report. This led them to be cautious about Indian equities.
This is evidenced by the fact that, on a year-to-date basis, FIIs have been net sellers to the tune of ₹28,476 crore via the exchange route. However, including primary market activity, there has been a net inflow of Rs. 17,315 crore, it added.
In comparison with other Asian EM peers, however, shows that India has stood out. According to data, during the same 14-day period, Taiwan saw a flight of $1.8 billion, Thailand $249 million, Indonesia $20 million, Malaysia $85 million, and the Philippines $49 million. Only South Korea, with $89 million of inflows, has been in positive territory, the report noted.
This is despite South Korea and Taiwan having raked in $6.44 billion and $4.35 billion YTD, respectively, and Indonesia $1.06 billion. Thailand has seen over $2 billion in outflows, while Malaysia and The Philippines have lost over $500 million YTD.
China had, however, seen over $48 billion in inflows until the March quarter, while Japan saw an influx of $16.7 billion up to May 5 (China and Japan don’t report numbers on a daily basis), it stated.
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