Foreign portfolio investors (FPIs) injected more than Rs 7,900 crore into Indian equities during the first week of July, buoyed by robust economic and earnings growth. Data from depositories showed that FPIs have now pumped Rs 1.16 lakh crore into equities so far this year.
Experts noted that the sustainability of FPI flows could hinge on the Union Budget and Q1 FY25 earnings.
According to the data, foreign portfolio investors (FPIs) have made a net inflow of Rs 7,962 crore in equities so far this month (till July 5). This followed a substantial inflow of Rs 26,565 crore in June, driven by political stability and market recovery.
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Earlier, FPIs had withdrawn Rs 25,586 crore in May due to election uncertainties and over Rs 8,700 crore in April amid concerns over changes in India’s tax treaty with Mauritius and rising US bond yields.
Before that, FPIs withdrew Rs 25,586 crore in May on poll jitters and over Rs 8,700 crore in April on concerns over a tweak in India’s tax treaty with Mauritius and a sustained rise in US bond yields.
Milind Muchhala, Executive Director at Julius Baer India, suggested that despite some waiting on the sidelines during election periods, India remains attractive for FPIs given its strong economic and earnings growth.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that FPI buying in India often shifts with global factors such as US bond yields and valuations in other emerging markets.
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In the fortnight ending June 30, FPIs focused their buying on telecom, financial services, autos, capital goods, healthcare, and IT sectors, while reducing exposure in metals, mining, and power sectors which had seen rapid gains recently.
Aside from equities, FPIs also invested Rs 6,304 crore in the debt market during the review period, bringing their total debt investments this year to Rs 74,928 crore.
