Momentum of FPI buying slows down

NEW DELHI: It appears that the momentum of buying has slowed down and FPIs have turned sellers during the last two trading days, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

FPI’s sustained buying continues in July. During the last three months, from May 1 through July 28, FPIs have invested Rs 1,36,351 crore in India. In July through 28, FPIs have invested in equity for Rs 45,365 crore, he said.

An important feature of FPI investment is that their buy/sell strategy is influenced by external factors like dollar index, US bond yields and global market trends, apart from domestic fundamentals, he said.

This is the reason why FPIs, during the last three months, have been buying the same financial stocks which they have been selling in the first three months of 2023.

Financials, automobiles, capital goods, real estate and FMCG continue to attract bulk of FPI investment, he added.

Compared with other countries, India has registered an FII inflow (equity) of $12.2 billion for the quarter ended June 30, 2023.

On the other hand, countries such as South Korea, Taiwan and Indonesia have received far less inflows compared with India, Jahnavi Prabhakar, Economist, Bank of Baroda said in a report.

Notably, the US and Thailand have seen FPI moving out of their respective countries. However, it is interesting to note that Japan has received a strong FPI inflow to the tune of $66 billion.

For debt flows, the US, Japan and South Korea outshines other countries in the fray.

India has relatively low debt inflow in comparison with other countries, though it still remains more than Indonesia, Malaysia and Thailand.

The uncertainty of not been included in MSCI index has also pushed debt flows farther away.