Where are FPIs pumping money?
The sectors which FPIs were selling in the beginning of current calendar year, have become darling of FPIs inflows from March 2023, onwards
Foreign Portfolio Investors (FPIs) are investing en masse in India’s stock market. Financials, auto, capital goods, real estate and FMCG have been the darling sectors of FPIs in India in financial year 2023-23. According to stock market analysts, these sectors have been receiving bulk of FPIs inflow since the beginning of FY24. Not a single month has gone passed by in FY24, that has seen FPIs outflows.
Overseas investors have been continuously picking up stake in domestic equities. Till July 28, 2023, foreign investors inflow reached Rs 45,365 crore. The tide of FPIs inflow had turned towards India’s shore in March 2023 itself. Since then, the wind has been blowing towards India’s shore only.
The sectors which FPIs were selling in the beginning of current calendar year, have become darling of FPIs inflows from March 2023, onwards. Foreign investors sold financial stocks from January, 2023 to March, 2023. But, since, April, 2023, they have been lapping up stocks from this sector.
As a result, according to NSE data, as of June 30, 2023, indices like Nifty Bank, Nifty PSU Bank and Nifty Private Bank have given three months return of more than 10%. (from April 1, 2023 – June 30, 2023). Whereas, 10 constituent index Nifty Financial Services was up 12% during this three months period. While, Nifty Auto was up 22% during the same period. And Nifty Realty has given whopping returns of 34% in this three months period.
Surge in Nifty Indices Due to constant FIIs Inflow from April 2023 to June 2023
Source: NSE
Well, according to the NSE data, these are the top 5 sectors where FPIs lapped most of the stocks in current financial year — financials, auto, capital goods, real estate and FMCG. At the same time, foreign investors have been net sellers of IT stocks in FY24. As a result, during the period from April 2023 to June 2023, Nifty IT gave muted returns of
Overall Nifty 50 has given year to date returns of 8.55% per cent. On Monday, July 31, 2023, the 50 constituet index closed at 19,753.80 points.
FPIs Inflow in CY23:
Source: PTI
Going forward, stock market analysts are not too optimistic on FPIs inflow in the near term as indices have surged significantly in the current fiscal. Plus, US Fed going with more rate hikes might not go down well FIIs investment in India.
However, in the long term analysts are still bullish on India’s growth story.
FPIs were net sellers of domestic equities in both previous two financial years.