From being net sellers until last week, they’ve come a long way this holiday-short weekend. In the first week of June, they were net sellers of domestic equity of Rs 14,794 crore but the second week ended with the selling figures falling to Rs. 3,064 crores.
However, their position as a net seller remains intact for a full year yet. They have an off-load equity of Rs 11,194 in 2024.
A breakdown of the FPI data from January shows that FPIs were net sellers in January, April and May as they collected Rs. 25,744 crore, Rs. 8671 crore and Rs. 25,586 crore shares were reduced. In February and March respectively they were Rs. 1,539 crore and Rs. 35,098 crore were net buyers of domestic equities.
On Friday, Indian headline indices ended in the red, snapping a six-session winning streak dragged by selling by foreign institutional investors (FIIs). They are Rs. There were net sellers at 1,790.19. As for Domestic Institutional Investors (DIIs), they have invested Rs. 1,237.21 crore shares were bought.
Commenting on this year’s FPI trends, expert VK Vijayakumar, who is chief investment strategist at Geojit Financial Services, said FPIs perceive Indian valuations to be too high and hence capital is shifting to cheaper markets. “FPI pessimism on Chinese stocks seems to have ended and there is a tendency to invest in Chinese stocks listed on the Hong Kong exchange as valuations of Chinese stocks have become very attractive,” he opined.
“The market is slowly stabilizing after the extreme volatility seen in the market in response to the election results (both exit polls and actual results). An important point to note is the high valuation of Indian stocks, especially in the broader market. High valuation. Going forward will attract more sales by FPIs,” he added.
Markets have rebounded smartly after the June 4 shocker on the back of unexpected election results that did not give the Bharatiya Janata Party (BJP) an absolute majority.
India’s benchmark index Nifty has gained 1,617 points or 7.4% since June 4, 2024, the day the election results were announced. The Nifty closed down 6% at 21,884.50. On Friday, June 21, it closed at 23,501.10. Meanwhile, it hit a fresh lifetime high of 23,664, up 1,779 points or 8.1%.
Commenting on how the trends have changed after the election results, Sunil Damania, Chief Investment Officer, MojoPMS said, “Foreign portfolio investors (FPIs) have changed their position in the equity market after the election results, investing Rs 23,786 crore since June 10. There are three main reasons for this positive trend, firstly, the government’s assurance of ongoing reforms, secondly, copper prices have fallen by 12% in the last month and thirdly, the market has been eagerly taken up by FPIs.”
However, these FPI inflows are concentrated in a few select stocks rather than being broad across the market or sectors, he said, adding that he sees FPI inflows being limited due to the high valuations that currently drive the Indian equity market.
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