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BENGALURU: Foreign portfolio investor (FPIs) inflows in Indian equities were at a four-month low of 122.62 billion rupees ($1.48 billion) in August, even as purchases rose in the second half of the month, data from the National Securities Depository Ltd (NSDL) showed.
FPIs bought shares worth 115.25 billion rupees on a net basis in the second half of August, up from 7.37 billion rupees in the first half, as strong domestic macroeconomic data and expectations of a rate pause by the US Federal Reserve at its September policy meeting aided sentiment.
“Foreign investors could be looking at Indian markets with fresh optimism once again,” said Shrikant Chouhan, head of research (retail) at Kotak Securities.
Macroeconomic data like strong first quarter GDP growth, robust goods and services tax collections and upbeat PMI data should bolster confidence in local markets, Chouhan added.
The moderation in FPI inflows contributed to the 2.53% fall in Nifty 50 last month, with the benchmark snapping a five-month winning streak. However, analysts termed the moderation as an exception, noting the recovery in inflows in the second half.
In the March-July period, FPIs bought Indian shares worth 1,553.08 billion rupees, triggering a 14.15% rise in the Nifty 50 index.
What FPIs bought and sold in August
FPIs turned net sellers in financial services, offloading 64.93 billion rupees, after buying shares worth 555.79 billion rupees in April-July.
Analysts said that the selling in financial services is due to concerns around net interest margins peaking out, but added it could be temporary due to steady earnings, stable asset quality in the sector and visibility of capex recovery in the economy.
The Nifty financial services index rose 13.08% between March and July, before sliding 3.66% in August.
Metals also witnessed selling by FPIs due to concerns over economic recovery in China, the world’s largest producer and consumer of metals.
In contrast, foreign investors piled on to information technology (IT) stocks on favourable valuations and power stocks on robust demand.
FPIs bought shares worth 115.25 billion rupees on a net basis in the second half of August, up from 7.37 billion rupees in the first half, as strong domestic macroeconomic data and expectations of a rate pause by the US Federal Reserve at its September policy meeting aided sentiment.
“Foreign investors could be looking at Indian markets with fresh optimism once again,” said Shrikant Chouhan, head of research (retail) at Kotak Securities.
Macroeconomic data like strong first quarter GDP growth, robust goods and services tax collections and upbeat PMI data should bolster confidence in local markets, Chouhan added.
The moderation in FPI inflows contributed to the 2.53% fall in Nifty 50 last month, with the benchmark snapping a five-month winning streak. However, analysts termed the moderation as an exception, noting the recovery in inflows in the second half.
In the March-July period, FPIs bought Indian shares worth 1,553.08 billion rupees, triggering a 14.15% rise in the Nifty 50 index.
What FPIs bought and sold in August
FPIs turned net sellers in financial services, offloading 64.93 billion rupees, after buying shares worth 555.79 billion rupees in April-July.
Analysts said that the selling in financial services is due to concerns around net interest margins peaking out, but added it could be temporary due to steady earnings, stable asset quality in the sector and visibility of capex recovery in the economy.
The Nifty financial services index rose 13.08% between March and July, before sliding 3.66% in August.
Metals also witnessed selling by FPIs due to concerns over economic recovery in China, the world’s largest producer and consumer of metals.
In contrast, foreign investors piled on to information technology (IT) stocks on favourable valuations and power stocks on robust demand.
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