Foreign Portfolio Investors Continue Buying Spree in Indian Equity Markets

NEW DELHI: Foreign Portfolio Investors (FBI)FPI) continue their shopping spree in Indian Stock Markets second consecutive month, with net foreign investment at Rs 32,365 crore in July, according to data from National Securities Depository Limited. This followed cumulative purchases worth Rs 26,565 crore in June.
Foreign investors“purchasing activity coincided with the activity of domestic institutional and retail investors, which fueled market indices Sensex and Nifty are hitting new highs. Notably, the Nifty recently crossed the 25,000-mark for the first time, registering an 11 percent gain in the last three months. This rise is attributed to strong GDP growthcontrolled inflation, high financial liquidity in the domestic market and favourable monsoon conditions.
FPI activity in June and July came after smooth election results and the formation of a new government. Earlier, FPIs were net sellers in the two months to June, but domestic institutional investors compensated with remaining net buyers.
“FPI inflows into emerging markets like India. FPIs may be thinking of pulling out more money from India as India is currently the most expensive emerging market. The developments in the US economy and markets in the coming days will set the trend for FPIs in August,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Vipul Bhowar, director of listed investments at Waterfield Advisors, said foreign mutual funds could focus on sectors benefiting from domestic reforms and growth, such as technology and infrastructure, while being cautious about sectors that are vulnerable to the global economic slowdown.
Milind Muchhala, executive director at Julius Baer India, has observed mixed activity among foreign investors (FPIs) recently, with both buying and selling.
“We have seen mixed activity from FPIs in recent times, with periods of buying and selling, which is likely to continue for some time. Their activity will continue to be influenced by various factors, including global equity market performance, dollar index movements, additional geopolitical events and opportunities in Indian markets, given slightly elevated valuation levels,” Muchhala said.
FPI involvement continues to play a significant role in the Indian equity market landscape, which is influenced by domestic and global economic conditions. As market dynamics evolve, investors are closely monitoring various factors to make informed decisions.