NEW DELHI:
Foreign portfolio investors
(
FPIs
) have again become
net buyers
in May after turning net sellers last month as they bought
equities
worth Rs 1,156 crore up until May 3, as per the National Securities Depository Limited (NSDL) data.
FPIs in April offloaded equities worth Rs 8,671 crore primarily due to the ongoing geopolitical crisis in the Middle East, which may have triggered investors to cut down their portfolio exposure.
Earlier, they remained net buyers for the first three months of the year until mid-April.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said, “The market is at record highs. There has been a pre-election rally. It is not as strong as in the past. More than anything else, FPIs will respond to changes in the US bond yields. If the US bond yields fall and the Indian economy and markets do well they will turn aggressive buyers.”
Several factors have contributed to a positive outlook for the Indian economy, including robust GDP growth projections, manageable inflation levels, political stability at the central government level, and indications that the central bank has concluded its monetary policy tightening cycle.
India’s GDP experienced a substantial 8.4 per cent growth during the October-December quarter of the 2023-24 financial year, maintaining its position as the fastest-growing major economy and is expected to sustain its growth trajectory in the future.
In December, FPIs accumulated stocks worth Rs 66,135 crore, while in November, the inflow amounted to Rs 9,001 crore, as per NSDL data. To provide context, the total inflow for the entire year was approximately Rs 171,107 crore, with over one-third of this amount occurring in December alone. The strong inflow of funds from FPIs had supported the benchmark stock indices in reaching all-time highs.
