FPIs invest ₹8,767 cr in equities in April so far, likely to buy capital goods & FMCG, sell IT stocks
As per NSDL data, FPIs invested ₹8,767 crore in Indian equities so far in April month. On the other hand, they are net sellers in the debt market with an outflow of ₹1,025 crore, while removing ₹200 crore and ₹193 crore from debt-VRR and hybrid instruments.
PremiumForeign portfolio investors (FPIs) have been buyers throughout the trading sessions in April month so far. Till April 13, FPIs pumped in ₹8,767 crore in Indian equities. FPIs are expected to continue this trend, however, their appetite for IT stocks may likely turn bearish after tech giants like TCS and Infosys missed street's estimates in Q4FY23. Capital goods, financials, and construction stocks are expected to see more buying going forward.
As per NSDL data, FPIs invested ₹8,767 crore in Indian equities so far in April month. On the other hand, they are net sellers in the debt market with an outflow of ₹1,025 crore, while removing ₹200 crore and ₹193 crore from debt-VRR and hybrid instruments.
In the previous month, FPIs pumped in ₹7,936 crore in Indian stocks.
Riding on the back of impressive buying in equities, FPIs investment in the overall domestic market stays positive with an inflow of ₹7,349 crore despite selling in other instruments so far in April.
Notably, April has seen two holiday-shortened weeks of trading sessions and despite lesser days trading FPIs have shown resilient likeness for equities.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "India has been one of the best investment destinations for FPIs among emerging markets in April so far., The correlation between FPI and the market has become very significant."
He added, "FPIs were continuous buyers in the market during the last ten trading days and the market posted continuous gains during the last nine trading days. FPI buying and short covering are driving the current rally."
Overall, FPIs are net sellers in the equities market due to their hefty selloffs in the first two months of 2023 (January to February). However, after buying in March, FPIs continued to invest even in April, which has offset some of the losses in equities. So far, in 2023, the outflow stood around ₹17,443 crore in Indian equities.
Markets have been in a 9-days rally, the longest since October 2020. They have been in green on all days of April hence.
Since March 29 to April 13th, Sensex skyrocketed by over 2,817 points or 4.9%. While Nifty 50 jumped by over 876 points or 5.2%.
Last week, on Thursday, Sensex ended at 60,431 up by 38.23 points or 0.06%. Nifty 50 closed at 17,828 up by 15.60 points or 0.09%.The upside was hindered by a sharp selloff in IT stocks following major Q4 earnings. It would be strong buying in banking and auto stocks that pulled Sensex and Nifty 50 out of bears' grip. Additionally, hopes for a further pause in the RBI repo rate after moderation in domestic CPI comforted sentiments. However, FOMC minutes hinting towards a 'mild recession' led to cautious betting.
Going ahead, Vijayakumar said, "Global market construct has also been positive., FPIs are buyers in capital goods, construction, and FMCG and sellers in IT and oil and gas."
According to Geojit's strategist, IT is likely to witness more selling in the coming days since the growth prospects for the segment appears weak an indicated from the Q4 results of TCS and Infosys. Capital goods, financials and construction related segments are likely to witness more buying as indicated
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