FPIs inflow over ₹16,400 crore in June so far, can this momentum continue?
Foreign portfolio investors (FPIs) have remained net buyers in in Indian equities in June and in the year so far, while it pumped in over ₹43,000 crore in Indian equities in May, which is the highest investment in nine months by FPIs.
Foreign investors have been buyers across sectors like financials, automobiles and auto components, capital goods and construction-related stocks. They were big buyers in financials and autos. They are sellers in IT, metals, power and textiles. The trend in FPIs is likely to continue ahead, which does bring a possible case for the Nifty 50 to touch a new record high.
As per the NSDL data, FPIs inflow in Indian equities comes to ₹16,406 crore in June. In May, FPIs invested ₹43,838 crore, which is not just the highest monthly buying of 2023, but also the highest since November last year.
“FPI inflows continued in June with a total investment of ₹16405 crores till 17th June. This sustained investment by FPIs is a reflection of their increasing confidence in the resilience of the Indian economy and the potential earnings of the corporate sector. There is a near consensus among the foreign investing community that India has the best growth and earnings story among the large emerging economies. FPIs are investing to exploit this potential,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
On Friday, Domestic equity benchmarks the Sensex and the Nifty clocked strong gains, ending at their fresh closing highs, boosted by positive global sentiment.
Sensex and Nifty hit their intraday highs of 63,520.36 and 18,864.70 respectively. Sensex closed 467 points, or 0.74 per cent, higher at 63,384.58 while the Nifty ended the day with a gain of 138 points, or 0.74 per cent, at 18,826.
Since the benchmark indices are near record levels and valuations are rich (Nifty is trading at 20 times FY 24 earnings ) profit booking can be expected in the near-term.
“An area of concern is that due to the El Niño phenomenon, monsoon has been deficient, so far, in 29 out of the 36 IMD divisions. This can improve in the coming weeks, as has happened in the past. If not, some institutional selling is likely,” he added.
In April month, FPIs inflow stood at ₹11,631 crore and ₹7,936 crore in March. The March investment was mainly driven by bulk investment in the Adani Group companies by the US-based GQG Partners. Year-to-date, FPIs are net buyers with an inflow of ₹35,748 crore in Indian equities.
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Updated: 17 Jun 2023, 04:41 PM IST
