FPIs turn net buyers in equity market in first week of Oct by infusing ₹2,440 cr

The first week of October witnessed more money coming into the equity market from foreign portfolio investors (FPIs). Despite the volatility in the equity market due to global headwinds, FPIs have pumped in about ₹2,440 crore here so far in October. As of now, the appetite for equities is better compared to the debt market as the start of this month recorded an outflow in the latter.

As per NSDL data, a total of ₹2,440 crore has been pumped by FPIs in the domestic equities between October 3 to 7, outrunning the debt market which recorded an outflow of ₹2,948 crore. On the other hand, debt-VRR saw an inflow of ₹459 crore while hybrid instruments registered a marginal outflow of ₹89 crore.

In September 2022, FPIs halted their buying streak of the two-consecutive month and pulled out ₹7,624 crore as inflationary pressure accelerated and recession fears escalated in major economies amidst monetary policy tightening.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "FPIs again turned sellers in India in September with a net equity sell figure of ₹7643 crores.( NSDL) FPIs were sellers in financial and IT services and buyers in telecom and capital goods. The renewed selling can be attributed to the steady rise in dollar which has triggered capital outflows from most emerging markets. FPIs turned marginal buyers in early October but there is no consistency in FPI activity. FPIs will turn sustained buyers only when dollar peaks and shows a sustained downtrend."

August is the biggest buying month so far in 2022, with an inflow of ₹51,204 crore in the equities followed by July where ₹4,989 crore was invested.

So far in October, FPIs have removed ₹138 crore in the overall Indian market (equity, debt, debt-VRR, and hybrids) as equities minimised the pace of outflows.

Year-to-date, FPIs have removed about ₹1,66,349 crore from equities alone. Taking other instruments into consideration, the overall Indian market saw an outflow of ₹1,72,891 crore so far in the current year.

Meanwhile, so far in October, FIIs removed up to ₹36.55 crore cumulatively from NSE, BSE, and MSEI.

After being a net buyer for three consecutive days, FIIs carried an outflow of ₹2,250.77 crore in the markets on October 7. This week, FIIs made a buying of ₹279.01 crore on October 6, ₹1,344.63 crore on October 4, and ₹590.58 crore on October 3. In September, FIIs sold equities to the tune of ₹18,308.30 crore.

On Friday, Sensex closed at 58,191.29 down by 30.81 points or 0.05%. While Nifty 50 ended at 17,314.65 lower by 17.15 points or 0.1%.

At the interbank forex market, the Indian rupee slipped to a fresh record low of 82.43 against the US dollar on Friday's trading hours -- before finally settling at 82.30 per dollar. A firm dollar, the bearish tone in domestic equities, elevated crude oil prices, and risk-averse sentiments dampened the performance.

Vinod Nair, Head of Research at Geojit Financial Services said, "Prior to the release of the US jobs data, the domestic market traded with cuts in line with its global counterparts. Stronger-than-anticipated job data may lead to a market decline as it could give the Fed more reasons to focus on inflation. Following OPEC+'s announcement of supply reductions, crude prices have continued to rise, while the rupee has dropped to a fresh low as a result of hawkish remarks from Fed officials."

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