Foreign investors have infused Rs 7,200 crore into Indian equities so far this month, driven mainly by US-based GQG Partners’ bulk investment in Adani group companies.
VK Vijayakumar, chief investment strategist at Geojit Financial, said FPIs are likely to remain cautious in the near term due to risk-off sentiment in equity markets globally due to stress in the US banking system and fall in banking stocks. Services, said.
The US banking system appeared to be under stress following the collapse of Silicon Valley Bank and Signature Bank earlier this month.
Most global equity markets saw a sharp correction, even as macro sentiment remained volatile as the focus shifted to weaknesses in European and US banks.
Srikant Chauhan, “On the economy front, US Federal Reserve hiked fed funds rates by 25 basis points, expressing confidence in the stability of the US financial system. FPI inflows are expected to remain volatile.” said Head of Equity Research (Retail), Kotak Securities Ltd.
Foreign portfolio investors (FPIs) invested Rs 7,233 crore in Indian equities till March 25, according to depository data.
This comes after net outflow of Rs 5,294 crore in February and Rs 28,852 crore in January. Earlier in December, FPI had invested a net Rs 11,119 crore.
Vijayakumar said the investments in March included a whopping Rs 15,446 crore investment by GQG in four Adani shares.
Barring this, FPI activity in equities represents a strong sell undercurrent.
In the calendar year 2023, FPIs sold equities worth Rs 26,913 crore.
On the other hand, FPIs pulled out Rs 313 crore from the debt markets during the period under review.
In terms of sectors, FPIs have been buyers in auto and auto components, financial services, metals and mining and power. However, he sold heavily in IT stocks.
Geojit’s Vijayakumar said that in India, the inflows would be mainly targeted at sectors of the domestic economy such as banking, capital goods and auto.
He added that a reverse trend in favor of IT and pharmaceuticals is likely in the near term as valuations of these segments have become attractive after the recent correction.
During the month, most emerging markets were FPI sellers except China, which witnessed inflows due to opening of trade.
Besides, India and Indonesia saw inflows during the month under review, while net outflows were seen in Philippines, South Korea, Taiwan and Thailand.