FPIs turn net buyers in February, infuse ₹1,539 crore in Indian equities; Will inflows sustain in March?

FPIs have bought ₹1,539 crore worth of Indian equities and the total inflow stands at ₹31,817 crore as of February 29, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL) data. On March 1, FPIs again infused ₹4,201 crore in Indian equities but offloaded ₹134 crore from debt markets.

FPIs outflow initially declined in February until they were net buyers by the end of the month, despite high US bond yields. Market experts say that normally when the US 10-year yield rises above 4.15 per cent, the FPIs sell heavily.

“For February FPIs have turned buyers in equity for ₹1,539 crore. This is despite the US bond yields ruling high with the 10-year yield at around 4.25 per cent,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

FPI activity in Indian markets

FPIs turned massive sellers in January 2024 snapping their buying streak as investments saw a sharp uptick in December 2023 after they reversed their three-month selling streak in November 2023.

However, inflow intensified in December on strong global cues after the US Federal Reserve signalled the end of its tightening cycle and raised expectations of a rate cut in March 2024. This led to a crash in US bond yields and triggered foreign fund inflows into emerging markets like India.

For the entire calendar year 2023, FPIs bought ₹1.71 lakh crore in Indian equities and the total inflow stands at ₹2.37 lakh crore taking into account debt, hybrid, debt-VRR, and equities, according to NSDL data. FPIs’ net investment in Indian debt market stands at ₹68,663 crore during 2023.

FPI inflows into Indian equities during November 2023 stood at ₹9,001 crore, compared to over ₹39,000 crore worth of shares sold in September and October together, according to NSDL data. Taking into account debt, hybrid, debt-VRR, and equities, FPI inflows were at ₹24,546 crore during the month.

Overall, only four months in 2023–January, February, September, and October- saw net FPI outflows from Indian equities. May, June, and July each recorded FPI inflows above ₹43,800 crore.

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Published: 02 Mar 2024, 04:53 PM IST