FPIs make first monthly buying of 2023 driven by Adani stocks block deal, inflows of ₹7,936 cr in equities in March
- As per NSDL data, FPIs inflow in equities stood at ₹7,936 crore during March. This is compared to the outflows of ₹5,294 crore in February and ₹28,852 crore in January respectively.
Foreign portfolio investors (FPIs) made their first monthly buying of 2023 in March with an inflow of ₹7,936 crore in Indian equities. Although in the majority part of March, markets were under pressure after two US banks' failure sparked contagion fear in the banking system, FPIs are broadly buyers driven by the major block deal in Adani stocks. The near-term outlook of FY24 looks positive for FPIs as the high valuation of Indian markets has corrected significantly.
As per NSDL data, FPIs inflow in equities stood at ₹7,936 crore during March. This is compared to the outflows of ₹5,294 crore in February and ₹28,852 crore in January respectively.
Due to a mega block deal in Adani Group in the initial days of March, where GQG Partners pumped in ₹15,446 crore in four stocks of the conglomerate ---- had led FPIs inflow at ₹13,540 crore in the overall market from March 1st to March 10th.
But banks contagion which sparked after two banks' failure in the US, has turned the market sentiment volatile and outflows have been recorded from the FPIs front.
As per Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, FPIs have been consistent buyers in capital goods and alternating between buying and selling in financial services. The sustained selling by FPIs appears to be over since they have turned buyers in the last few days.
In overall March, Sensex dipped by 419.56 points or 0.71%, while the Nifty 50 shed 91.15 points or 0.52%.
Also, foreign institutional investors (FIIs) made buying of ₹1,997.70 crore in March in the equities.
Going ahead, Vijayakumar said, "the near-term outlook for FPI looks much more positive now. Even though Indian valuation continues to be relatively high, the recent market correction has made valuations a bit more reasonable than earlier."
An important factor, as per Vijayakumar, is the impressive turnaround in India’s CAD which has improved substantially due to rising exports. He said, "The CAD which was 4.4% in Q2FY23 has turned into a surplus in Q3 FY23."
Therefore, he added, "the INR is likely to be stable, going forward. This may restrain FPIs from turning into aggressive sellers. FPIs turning buyers in banking will help banking stocks scale higher levels assisted by good Q4 results."
Apart from equities, FPIs were sellers in the debt market with an outflow of ₹2,505 crore in March. They also offloaded ₹727 crore in debt-VRR instruments. On the contrary, FPIs made investments in hybrid instruments to the tune of ₹1,195 crore.
Taking the above, FPIs are broadly net buyers in March in the overall market with an inflow of ₹5,899 crore. This is compared to selling of ₹4,139 crore in February and ₹26,544 core in January.
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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