Tag: foreign portfolio investors

FPIs net buyers in November; invest Rs 5,319 crore, BFSI News, ET BFSI

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New Delhi: Foreign portfolio investors (FPI) have pumped in a net sum of Rs 5,319 crore in Indian capital markets despite a massive correction seen in equities over the last fortnight. In October, they were net sellers to the tune of Rs 12,437 crore.

As per depositories data, overseas investors put in a net Rs 1,400 crore into equities and Rs 3,919 crore into the debt segment between November 1-26.

This translated into total net investment of Rs 5,319 crore.

“Since FPIs have been holding large quantity of banking stocks, they have been major sellers in this segment. Sustained selling has made banking stocks attractive from the valuation perspective,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

He further noted that sharp correction in the market on 26th November has been mainly triggered by concerns arising out of the new strain of the virus spotted in South Africa, Botswana and Hong Kong.

“Despite recent correction, the markets continue to be at elevated levels and hence FPIs would have booked profits,” said Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.

Trend reversal on a weekly basis has become a norm with respect to FPI flows in the Indian debt markets, he added.

FPIs would be closely watching the spread of the new coronavirus variant and its possible impact on the growth globally.

Higher valuation is also a concern which may continue to trigger profit booking at regular intervals, he said.

“Future of FPI flows is expected to remain volatile given key events such as upcoming state elections, expectation of rise in interest rates and concerns a new Covid variant will prompt fresh mobility restrictions, hindering economic recovery,” said Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities.



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FPIs pull out net Rs 6,105 cr from Indian capital mkts so far this fiscal, BFSI News, ET BFSI

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Foreign portfolio investors (FPIs) pulled out a net Rs 6,105 crore from the Indian capital markets so far in the ongoing financial year amid the pandemic and resultant restrictions in many parts of the country. The equity benchmark BSE Sensex has jumped 3,077.69 points or 6.21 per cent during April-July this fiscal.

Reflecting an upbeat sentiment in the market, the benchmark had reached its all-time high of 53,290.81 on July 16, 2021. It closed at its lifetime high of 53,158.85 on July 15.

According to the depositories data, Rs 6,707 crore were withdrawn on a net basis from equities during the initial four months of this fiscal.

At the same time, a net sum of Rs 602 crore was invested in the debt segment.

This took the total net withdrawal to Rs 6,105 crore during the period under review.

The data showed that FPIs were net sellers in all the months barring June when they had invested Rs 13,269 crore.

The net outflow stood at Rs 9,435 crore in April, Rs 2,666 crore in May and Rs 7,273 in July.

“What is encouraging during the first four months is the fact that the number of new investor registrations in India is up 2.5 times year on year as per data released by the NSE,” said S Ranganathan, head of research at LKP Securities.

Market experts noted that the financial year started with a surge in COVID-19 cases and the consequent restrictions imposed by various states which dented investors’ sentiment.

June witnessed a gradual opening up of the localised lockdown and improved investor sentiments on the back of consistently falling coronavirus cases in the country, hopes of an early opening of the economy along with good quarterly results as per Himanshu Srivastava, associate director – manager research, Morningstar India.

“FPIs started to turn cautious towards Indian equity markets from mid of June and continued with the same stance through July. US Fed‘s hawkish statement that it might raise interest rates much earlier than assumed was the precursor for the change in their stance,” Srivastava added.

He further said that there are outflows but they are not exorbitantly high and this signifies that foreign investors are adopting a cautious stance towards Indian equities rather than turning negative on it.

Going forward, on the back of US Fed monetary policy which is keeping its benchmark policy rate unchanged, while indicating that they have begun talking about scaling back bond buying, and rising crude oil prices, FPI flows in the domestic market is expected to remain volatile, said Shrikant Chouhan, executive vice president, equity technical research at Kotak Securities.



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FPIs turn net buyers in Jun; invest Rs 12,714 cr in Indian markets, BFSI News, ET BFSI

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New Delhi: After remaining net sellers for two months in a row, foreign portfolio investors (FPIs) in June turned net buyers by pumping in a net Rs 12,714 crore into Indian markets. Prior to this, overseas investors had pulled out Rs 2,666 crore in May and Rs 9,435 crore in April.

According to depositories data, FPIs invested Rs 15,282 crore in equities between June 1 and 25.

At the same time, FPIs withdrew Rs 2,568 crore from the debt segment.

The total net inflow stood at Rs 12,714 crore during the period under review.

Bajaj Capital Joint Chairman and MD Sanjiv Bajaj said the inflow in June is on account of “favourable global cues and improving outlook for the Indian economy amidst a sharp fall in the number of COVID-19 cases easing of lockdown restrictions in some parts and a pick-up in vaccination.”

India can witness ‘V’-shaped growth revival amid forecast of a normal monsoon, supportive monetary policy, a deleverage balance sheet of the corporate sector and a well-capitalised banking system, he added.

Geojit Financial Services Chief Investment Strategist V K Vijayakumar said, “High delivery volumes in IT (information technology) and metal stocks indicate strong institutional buying.”

Kotak Securities Executive Vice-President (Equity Technical Research) Shrikant Chouhan said that overall, the MSCI Emerging Markets Index gained nearly 1.49 per cent this week.

Except for India and Indonesia, all key emerging and Asian markets have seen FPI outflows this month to date, he further noted.

Indonesia saw month-to-date FPI inflows of USD 363 million. On the flip side, Taiwan, South Korea, Thailand and Philippines saw month-to-date FPI outflows of USD 2,426 million, USD 1,218 million, USD 124 million and USD 64 million, respectively, he said.

Morningstar India Associate Director (Manager Research) Himanshu Srivastava said, “From the long-term perspective, India would attract foreign investments as the macroeconomic environment improves and the domestic economy starts treading on the recovery path.”

So far, the ultra-loose monetary policy stance by central banks globally to support the economy in the aftermath of the coronavirus pandemic had opened flood gates of foreign money into emerging markets like India, he added.

However, the US Federal Reserve‘s hawkish statement dented sentiments and prompted foreign investors to turn cautious, he said.



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Celebrations at Dalal Street; Sensex crosses 50k mark for the first time, BFSI News, ET BFSI

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The BSE barometer of top 30 firms, S&P BSE Sensex, reached the 50,000-mark for the first time on Thursday, hitting a record high of 50,140 in opening deals. The market capitalisation of listed firms on the BSE, too, touched a record high of Rs 199 trillion.

Sensex’s journey from 45,000 to 50,000 currently is the fastest 5,000-point rally in the history of Dalal Street’s oldest equities index and was completed in just 48 days. It’s run from 40,000 to 45,000 levels took 561 days to accomplish.

According to experts, Foreign Portfolio Investors have been the main driver behind the market rally in India. After the initial bout of selling in the earlier part of 2020, FPIs have been consistently buying Indian equities so far. As per the data available with the NSE, In the year 2020, FPI made a net equity investment of Rs 1.5 lakh crore into the Indian market.

Vijay Chandok – MD & CEO, ICICI Securities said- “Sensex crossing the important milestone of 50,000 is a telling sign of economy and markets shifting orbits on broad-based recovery and better days ahead. The combination of strong capital inflows, low interest rates and leaner balance sheet of India corporates along with government measures for growth is expected to lift the economic growth ahead. The same is likely to resonate in capital markets, thereby keeping the markets buoyant in the long term.”

Global markets have remained supportive so far. Yesterday Wall Street hit new records and stock markets across the globe climbed after US President Joe Biden took office on Wednesday as traders were joyful over his plan to inject even more stimulus into the world’s largest economy

Investors’ sentiment turned positive after the government managed to contain the spread of the coronavirus. Fresh Covid cases have fallen from a peak of more than 1 lakh daily cases to around 15,000 per day now, which boosted hopes of faster economic recovery and further opening of the economy.

Gaurav Awasthi, Senior Partner – IIFL Wealth Management said- “Sensex at 50K is a psychological feel good factor and has no significance on the decision to invest or exit from equity markets. The relevant yardsticks to look at for investing include the current valuations and future earnings trajectory of underlying companies. The longer term view remains positive given the strong tailwinds in a host of industries including IT, pharma and manufacturing. However, the current valuations do warrant some caution with likelihood of increased volatility in the short term.”

Experts also believe that the forthcoming Budget, just 10 days away from now, will also prove to be critical for the markets, as it may showcase the government’s agenda for reforms and growth of the economy going forward. Many also believe that as Sensex crosses 50k, valuations look stretched. Valuations are a function of earnings, and earnings are not coming through making it a key risk at the current juncture.

“I don’t think the market is overvalued by a big margin. It is just that it is looking at the future with a lot of positivity. Now, if those corporate earnings materialise, those growth materialises then Sensex will continue to rise. But please remember, Sensex will go up and down. From its fair value, it can become cheaper and more expensive. Very few people will be able to predict how Sensex will move in the short term”- said Motilal Oswal, MD and CEO, Motilal Oswal Financial Services.



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