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Foreign Portfolio Investors (FPIs) continued to remain bullish on the Indian stock market at the start of the second quarter of the current financial year as they injected Rs 21,944 crore so far.
In the first seven days of July, foreign investment institutions pumped nearly 46 percent of the amount they pumped into domestic stocks in the whole month of June.
In the previous month, foreign investors bought Rs 47,148 crore worth of local stocks, which was the highest in 10 months, according to data from National Securities Depository Ltd (NSDL).
Strong flows from the foreign investment index also supported a rise in the stock market during the past week. The BSE Sensex rose to a new high of 65,785.64 on July 6. The index touched a new high of 65898.98 during daily trading on July 7 before settling at 65280.45. The NSE Nifty Index also rose by 99 points to 19497.30 in a buying frenzy on July 6th.
“Foreign investment inflows into India worth Rs 21,943 crore inflows (including wholesale deals) continue till the 8th of this month (July). The turnaround was in FPI inflows which were negative of Rs 34,626 crore in January and February ( Taken together) this year is the main driver of the strong rally we have been seeing in the market since the lows in March,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Bank of Baroda economist Jahanvi Prabhakar said the Indian economy remains a favorite place for investment as evidenced by strong FPI inflows in the past few months on the back of stable government policies, strong macroeconomic fundamentals, stable inflation and sustainable growth rates.
On the other hand, global economies witnessed challenges represented by slowing growth, high inflation, fears of recession, and cycles of raising interest rates by central banks. In terms of steady growth, the Chinese economy has also experienced some disruptions, which has led investors to rely on other countries for better returns.
“Countries like India, Japan and South Korea made the most gains compared to their global peers, especially in stock markets,” Prabhakar said.
Foreign investment firms are steadily purchasing financial services, automobiles, capital goods and construction. They’ve recently ramped up buying in consumer goods and power. The selling trend continues in the IT sector.
In the April-June quarter, foreign investment institutions injected Rs 1.02 crore into equity. In the first half of the year 2023, the initial foreign companies bought Rs. 98,351 crore of local stocks. They were selling shares in January (Rs. 28,852 crore) and February (Rs. 5,294 crore) but turned into buyers of local equity in March.
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