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The Foreign Portfolio Investors (FPIs) significantly increased their investments in the Indian stock markets in the last week of June, according to data from the National Securities Depository Limited (NSDL).
The net investment by FPIs stood at Rs 16,672.2 crore during the last week, with a notable surge on Friday alone amounting to Rs 6,966.08 crore. This uptick marks a turnaround in FPI sentiment for the month. Overall, FPIs have injected a net investment of Rs 26,565 crore into Indian equities in June, following initial selling earlier in the month after the announcement of election results. This shift in strategy reflects changing market dynamics and perceptions of political stability despite recent developments. "FPI's investment of Rs 26,565 crores in equity in June marks a reversal of their strategy of selling in the two preceding months. Political stability despite the BJP not getting majority on its own, and the sharp rebound in markets aided by steady DII buying and aggressive retail buying, has forced the FPIs to turn buyers in India. It appears that FPIs have realised that selling in the most performing market would be a wrong strategy. FPI buying can sustain provided there is no sharp up move in U.S. bond yields," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. The experts also noted the positive impact of India's inclusion in the JP Morgan Bond Index, which has attracted substantial debt inflows amounting to Rs 68,674 crore in 2024. This inclusion is expected to lower government borrowing costs and reduce capital expenses for corporations, thereby supporting positively the overall economy and equity markets. NSDL data further highlights that FPIs increased their investments in real estate, telecommunications, and financial sectors during June while reducing exposure to IT, metals, and oil and gas sectors. Analysts anticipate continued FPI interest in financial stocks going forward. During the previous months in May the FPIs withdrew Rs 25,586 crore from the equity market, while in April, they were net sellers with a withdrawal of Rs 8,671 crore. This trend of outflows created selling pressure in the Indian equity market. But now the surge in FPI investments points out to the renewed confidence by investors in India's market potential and economic outlook. (ANI)
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