[ad_1]
In less than three weeks of August, the foreign portfolio investors (FPIs) made their biggest investment of the year. FPIs showed a strong appetite for the equities market as the inflow neared ₹44,500 crore so far this month. While the debt market has also seen some traction from overseas investors, however, is fractional compared to the stocks. After being net sellers for the first six months of 2022, FPIs turned into net buyers in July and the momentum increased sharply in August on the back of a robust recovery in the exchanges.
Data on NSDL showed that FPIs bought equities to the tune of ₹44,481 crore between August 1 to August 19. This is the highest buying so far in the current year. The inflows stood at ₹4,989 crore in July month.
Meanwhile, between August 1 to 19, the FPIs invested merely ₹1,674 crore in the debt market, while the inflow is at ₹1,255 crore in the debt-VRR instrument. FPIs showed buying interest after being net sellers for the first seven months of 2022 here.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “FPIs turned net buyers in the Indian market in July and the buying momentum increased in August with steady buying through the exchanges.”
He added, “The main trigger for the sustained buying has been the steady fall in the dollar index from above 109 in end July to around 105 recently. But on the 19th the dollar index has again moved up and crossed 107. If this trend continues capital inflows might be impacted. FPIs have been buyers in the debt market too with a net buy a figure of ₹2104 cr till 19th August.”
From January to June this year, FPIs pulled out a massive ₹2,17,358 crore from the equities market. June saw the most selling in the year with an outflow of ₹50,203 crore in this market.
However, due to buying in July and August, some outflows in the equities have been recovered. Now, overall, FPI outflow in the equity market is around ₹1,67,888 crore year-to-date.
Although, the FPIs selloff in the debt market is still lower compared to the equities. Overall, the outflow in debt instruments is around ₹15,252 crore year-to-date, on the other hand, they were buyers in debt-VRR with an inflow of ₹3,554 crore.
Overall, FPIs have removed around ₹1,79,452 crore from the Indian market (including equities, debt, debt-VRR, and hybrid) year-to-date.
Going forward, Vijayakumar said, “The near-term trend in capital flows will be influenced mainly by the movement of the dollar. In emerging markets, India is likely to outperform with the best GDP growth this year and the next. So, India is likely to attract more capital flows compared to other emerging markets. However, the elevated valuations in India are a concern”
Download The Mint News App to get Daily Market Updates.
More
Less
[ad_2]
Source link