Foreign Investors Invested Rs 5,000 Crore In Indian Equities

Foreign investors invested Rs 5,000 crore in Indian equities in July, Foreign investors returned after 9 months: FPIs Return to Indian Equities. 

Foreign investors have become net buyers after nine consecutive months of continuous selling.

Foreign investors have invested around Rs 5,000 crore in Indian stock markets in July on the soft dollar index and good corporate earnings.

This is in sharp contrast to the net outflow of Rs 50,145 crore from the stock market seen in June.

This was the highest net outflow since March 2020, when foreign portfolio investors (FPIs) pulled out Rs 61,973 crore from equities, data from the depositories showed.

Hitesh Jain, Lead Analyst, Institutional Equities, Yes Securities believes that FPI inflows will remain positive during August, as a worst-case scenario for the rupee is over and oil seems confined in a range.

Additionally, the earnings story remains strong, with strong revenue growth offsetting the contraction in profit margins, he added.

According to depository data, FPIs invested a net Rs 4,989 crore in Indian equities in July. He was a buyer nine days a month.

Foreign investors became net buyers in July after nine months.

FPIs became net buyers for the first time in July after nine consecutive months of massive net outflows, which started in October last year.

Between October 2021 and June 2022, he made huge sales worth Rs 2.46 lakh crore in the Indian equity markets.

Himanshu Srivastava, Associate Director Manager Research, Morningstar India, said the turning point for net flows in July was the statement of US Federal Reserve Chairman Jerome Powell that the US is not currently in recession.

Recent Corrections in Indian Equity Markets.

TradeSmart Chairman Vijay Singhania said strong corporate numbers have also boosted inflows.

VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said moderation in the dollar index and good quarterly earnings from financials helped the sentiment improve.

Additionally, the recent correction in the Indian equity markets also provided a good buying opportunity and FPIs are taking advantage of this by choosing high-quality companies.

FPI withdraws a net amount of Rs 2,056 crore from the loan market.

However, during the month under review, FPIs pulled out a net amount of Rs 2,056 crore from the loan market.

According to Srivastava, this reversal in net outflows cannot be construed as a change in trend or that FPIs have pulled out a net amount of Rs. Fully refunded.

While this is a welcome change on the part of foreign investors, the scenario is evolving at a fast pace and clarity may take some time to come.

He said that the concern about America going into recession remains. Any aggressive rate hike by the US Fed or its expectation could further exacerbate capital outflows into emerging markets such as India.