Foreign Portfolio Investors (FPIs) have demonstrated their continued confidence in Indian markets, with data from the National Securities Depository Ltd (NSDL) revealing that FPIs bought Rs 1,539 crore worth of Indian equities. The total inflow, encompassing debt, hybrid, debt-VRR, and equities, stands impressively at Rs 31,817 crore as of February 29.
On March 1, FPIs further bolstered their investment in Indian equities, injecting an additional Rs 4,201 crore. However, they concurrently offloaded Rs 134 crore from debt markets.
Despite the challenges posed by high US bond yields, FPIs reversed January’s selling trend and emerged as net buyers in February. The capital outflow from Indian equities by FPIs for the year 2024 currently stands at Rs 20,004 crore.
February saw FPIs being notable sellers in financials and FMCG sectors. Market experts observed a decline in FPI outflows throughout February, leading to them turning net buyers by the end of the month, even with the persistent challenge of high US bond yields. Typically, when the US 10-year yield surpasses 4.15%, FPIs tend to divest significantly.
While maintaining their foothold in equities, FPIs are steadily increasing their presence in the debt market. February witnessed FPIs buying debt amounting to Rs 22,419 crore, building upon the Rs 19,836 crore they invested in January. Analysts predict this trend of steady debt investment is likely to persist.
“The overall numbers have been flattish while the cash segment has seen negative flows. Although if you look at commentaries from large FPIs, it reflects a very positive outlook,” said Divam Sharma, Founder and Fund Manager at Green Portfolio
Sharma also added, we would continue to see the flows coming in over the long term while the short term might be volatile considering primarily interest rate and US market sentiments.
Notably, Foreign Institutional Investors (FIIs) were net buyers in Indian markets this week, with reduced outflows amid robust market sentiments. The domestic equity benchmark, Nifty 50, touched record highs, driven by strong macroeconomic indicators. Domestic Institutional Investors (DIIs) mirrored this positive sentiment, remaining net buyers and counterbalancing any foreign outflows.
Although FIIs were buyers in three out of five sessions this week, the net investment value stands at Rs 23.51 crore. Meanwhile, DIIs were buyers for three out of five sessions, with a total investment of Rs 8,268 crore, as per stock exchange data. On a monthly basis, FIIs injected over ₹870 crore in cash markets despite the challenges posed by high US bond yields.