Adani block deal impact: FPIs sold ₹5,294 cr in equities in Feb, but buys ₹8,939 cr in 3 days
Last week, mega-buying from foreign investors in Adani Enterprises, Adani Green Energy, Adani Ports, and Adani Transmission lifted overall market sentiments. US-based GQG Partners purchased equity shares in these Adani companies for a massive ₹15,446 crore in a series of secondary block deals.
Foreign portfolio investors (FPI) closed the month of February as net sellers with an outflow of more than ₹5,200 crore in Indian equities. However, the start of March month has seen hefty buying from FPIs. Between March 1st to March 3, FPIs have pumped in over ₹8,300 crore in equities. The strong buying in the initial days of the current month can be due to large inflows from foreign investors in four Adani firms. Going forward, bond yields are likely to play a spoilsport for foreign funds inflow in domestic equities.
As per NSDL data, FPIs pulled out ₹5,294 crore from equities during the overall February month. While they were net buyers in the debt market with an inflow of ₹2,436 crore this month.
In January month, the outflow stood at ₹28,852 crore from equities.
Meanwhile, in the first three trading sessions of March (1st to 3rd), FPIs have infused a whopping ₹8,939 crore in Indian equities, while their buying in debt instruments have been merely ₹380 crore.
Last week, mega-buying from foreign investors in Adani Enterprises, Adani Green Energy, Adani Ports, and Adani Transmission lifted overall market sentiments. US-based GQG Partners purchased equity shares in these Adani companies for a massive ₹15,446 crore in a series of secondary block deals.
Overall, in the week from February 27 to March 3rd, Indian equities clocked an inflow of ₹6,010.44 crore from foreign institutional investors (FIIs). FIIs sold ₹2,022.52 crore on February 27, while the outflow was at ₹4,559.21 crore on February 28 and ₹424.88 crore on March 1st. However, they made a massive buying of ₹12,770.81 crore on March 2nd followed by another inflow of ₹246.24 crore on March 3rd.
In February month, FIIs sold ₹11,090.64 crore compared to the previous month's outflow of a massive ₹41,464.73 crore, as per Stock Edge data.
Dr.V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "FPIs continued selling in early March too. However, the data ( NSDL) shows a net FPI figure of ₹8902 crores up to 4th March. This discrepancy is due to the US-based investment firm GQG making a massive investment of ₹15446 crores in four Adani stocks."
However, Vijaykumar also said, "excluding this, FPIs continued to be sellers to the tune of ₹6544 crores in March till 4th. Excluding the GQG investment, FPIs have sold equity to the tune of ₹41169 crores in 2023."
Due to strong buying in the last trading session of last week, Sensex's overall weekly performance was up by 1.3% and the Nifty 50 surged by 0.9%. On Friday, after rising by nearly 2% each, Sensex closed at 59,808.97 up by 899.62 points or 1.53% and Nifty 50 ended at 17,594.35 higher by 272.45 points or 1.57%.
Going ahead, Vijayakumar said, "FIIs are likely to sell at higher levels since the US 10-year bond yield is at 4% and this is an attractive risk-free investment for FPIs. FPIs have been buyers in financials, capital goods, and autos and sellers in Oil & Gas and metals."
Year-to-date, FPIs are net sellers with an outflow of ₹21,256 crore. This comes after including, an outflow of ₹25,207 crore in Indian equities, ₹1,964 crore in debt-VRR, and ₹431 crore in the hybrid market --- and also adding an inflow of ₹6,347 crore in the debt market.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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