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Business News/ Markets / Stock Markets/  FPIs taper off selling in Indian equities in February
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FPIs taper off selling in Indian equities in February

In the current calendar year so far, FPIs have net sold ₹26,374 crore worth of shares

The year 2022 saw the worst outflow, worth ₹1.21 lakh, following aggressive rate hikes by the central banks globally. (Photo: Reuters)Premium
The year 2022 saw the worst outflow, worth 1.21 lakh, following aggressive rate hikes by the central banks globally. (Photo: Reuters)

Mumbai: Foreign portfolio investors (FPIs) have continued to offload Indian equities in February, although the pace has moderated, official data shows.

In the fortnight ended 15 February, foreign investors pulled out a total of 4,919 crore from Indian stock markets, a marked decrease from the 29,177 crore divested in the 15 days through 31 January, according to data from the National Securities Depository Ltd (NSDL).

Financials services saw the most selling, with FPIs dumping stocks worth 7,536 crore, primarily driven by a decline in HDFC Bank shares after the lender reported a year-on-year net interest income growth of 24% to 28,470 crore, falling short of market expectations. Here as well, the selling moderated from the previous fortnight when 31,261 crore worth of shares were liquidated.

"There has been a slowdown in selling by FPIs with banks like HDFC (Bank) falling from 1,700 to 1,400 levels, at which the lender is getting support," said SK Joshi, ED, Khambatta Securities. "They are on wait-and-see ahead of the general elections' outcome in May."

The construction sector followed, with disposals amounting to 4,251 crore, along with telecom and fast-moving consumer goods sectors, witnessing sales of 3,766 crore, and 3,011 crore, respectively.

Despite these outflows, the Nifty Index managed to climb 0.98% to 21,910.75 in the same period.

The Indian market's robust performance until recently has been buoyed by strong investments from both domestic and foreign institutional investors. In 2023, FPIs net invested 1.71 trillion into Indian shares, with domestic institutional investors contributing 1.85 trillion.

So far in the current calendar year, FPIs have net sold shares worth 26.374 crore. 

However, 2022 saw the worst outflow, worth 1.21 trillion, following aggressive rate hikes by central banks globally. 

FPIs, meanwhile, seem to have turned buyers shortly after 15 February, as NSDL data showed their net selling for the month through 21 February to have shrunk to 630 crore.

During the fortnight under review, mutual funds purchased shares worth 15,822 crore, while retail investors and high net-worth individuals sold shares worth 6,275 crore on the BSE. The numbers for the National Stock Exchange were not available until press time.

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Published: 22 Feb 2024, 01:37 PM IST
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