FPIs invest ₹11,631 cr in stocks in April, highest monthly buying of 2023. What to expect ahead?
Foreign portfolio investors (FPIs) made their highest buying of 2023 in April to the tune of ₹11,631 crore in Indian equities. This would be the second consecutive month where FPIs are buyers. Despite the IT sector’s bittersweet Q4 earnings that led to a massive selloff in tech biggies, both Sensex and Nifty 50 have shown resilient performance in April.
As per the NSDL data, FPIs purchased equities worth ₹11,631 crore in April 2023. This is multifold higher than the investments made in debt and debt-VRR instruments to ₹806 crore and ₹1,235 crore in the said month. FPIs are net sellers in a hybrid market with an outflow of ₹126 crore.
Overall, in April, due to strong buying in the equity market, FPIs investment broadly in the Indian market is around ₹13,545 crore (including inflows of equities, debt, debt-VRR, and hybrid).
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “FPIs appear to have changed their investment strategy in India in recent days. While they were sellers in the initial three months of this year, they have turned buyers in April and aggressive buyers in the last few days of April.”
Sensex has gained by nearly 2,121 points or 3.60%, while Nifty 50 zoomed by over 705 points or 4.06% in April month.
The latest reading of Sensex is 61,112.44 up by 463.06 points or 0.76% and Nifty 50 higher by 149.95 points or 0.84% to 18,065 on Friday. April 28th is the last trading day of this month.
In March month, FPIs were also buyers with an inflow of ₹7,936 crore in the equity market.
An important macro factor that has tilted the FPI approach would be the appreciation of the rupee.
Vijaykumar added, “Rupee which had touched a low of 82.94 to the dollar in late February this year has now appreciated to 81.75 to the dollar.”
On the way ahead, the expert added, “India’s Current Account Deficit is declining, and if this trend continues the rupee may appreciate further. FPIs are likely to bring more inflows into India in this context. FPIs have been buying in financial services and auto and auto components.”
Year-to-date, FPIs are net sellers in Indian equities with an outflow of ₹14,579 crore. The highest-selling month of 2023 is January where an outflow of ₹28,852 crore was recorded. While in February, FPIs sold ₹5,294 crore.
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Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.