The Foreign Portfolio Investment (FPI) in the Indian equity market increased by ₹7,390 crores during the second week of July, according to investment data from the National Securities Depository Limited.
The data also pointed out that the net investment by Foreign Portfolio Investors (FPIs) in July has increased to ₹15,352 crores. Before that during the first week of July, FPIs infused ₹7,962 crores into the Indian equity market.
Foreign Institutional Investors were sellers in January, April, and May, cumulatively selling equities worth around ₹60,000 crores. However, they were buyers in February, March, and June, with cumulative purchases amounting to ₹63,200 crores.
How does India’s foreign investments compare with domestic investments?
“The most significant feature of institutional equity flows into the Indian market is the erratic nature of FII flows and the steady growth nature of DII flows. DIIs have been sustained buyers in all months of calendar year 24 so far whereas FIIs alternated between buying and selling” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Last month in June, the FPIs turned net buyers in Indian markets after two months of selling. In June, FPIs injected a net investment of ₹26,565 crore into Indian equities, following initial selling earlier in the month after the announcement of election results.
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Before that in May, the FPIs withdrew ₹25,586 crore from the equity market, while in April, they were net sellers with a withdrawal of ₹8,671 crore.
“Inflows into DIIs like mutual funds are now on an upward trajectory and this will keep the markets resilient. FII flows will continue to be erratic influenced by global factors. Better-than-expected results from IT majors who have come out with results so far indicate the potential for FII buying in these stocks where valuations are not excessive” said Vijaykumar.
This trend of outflows created selling pressure in the Indian equity market. But now, the surge in FPI investments points to the renewed confidence by investors in India’s market potential and economic outlook. Now the investors will monitor the upcoming budget by the central government and the markets will react accordingly.
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