While foreign portfolio investors (FPI) have been paring their exposure to the Indian equity markets this year, domestic investors continue to be buyers having purchased stocks worth Rs 10,517 crore so far in January.
Selling by FPIs to the tune of $1.64 billion has resulted in the Sensex losing 6.4% and Nifty 6.6% this year. In 2015, domestic investors had bought equities worth Rs 67,261 crore.
Retail investors invest in mutual funds since 2015 with total inflows into equity schemes of mutual funds at Rs 86,959 crore, AMFI data showed. Mutual fund managers cite the latest market correction as an opportunity for Indian investors to increase their allocation towards equities.
In a recent media interaction, S Naren, CIO, ICICI Prudential AMC, pointed out that “historically whenever foreign institutional investors have turned big sellers of Indian equities due to global reasons, including the 2008 selloff, it has provided a buying opportunity”. Naren pointed out that currently, insurance companies are under-invested in equities and have substantial resources to invest in the large-cap space.
FPIs have been pulling out from all Asian markets, shows Bloomberg data. Besides India, FPIs withdrew equities worth $1.91 billion and $2.33 billion from South Korea and Taiwan, respectively, in 2016 so far.