Indian Stock Market Resilience Leads Foreign Portfolio Investors to Become Buyers
New Delhi, March 30 (IANS) The Indian stock market shows resilience with improving economic macros leading to foreign portfolio investors (FPIs) turning buyers in India. Chief Investment Strategist, V K Vijayakumar of Geojit Financial Services, notes a distinct trend in FPI flows with erratic equity flows but steady positive debt inflows.
In January, there were equity outflows of Rs 25,743 crore, turning into a mild positive inflow of Rs 1538 crore in February and a sharp spurt to Rs 35,098 crore inflows in March. FPIs showed interest in capital goods, automobiles, financials, telecom, and real estate but sold in the IT sector. Debt inflows have been steady, reaching Rs 55,857 crore in 2024 so far.
Alok Agarwal of Alchemy Capital Management mentioned that FPI holdings in the Indian market dropped to a decadal low of 16.6 per cent in 2023 due to portfolio underperformance and a spike in US bond yields. Despite this, FPI inflows in FY24 remained robust, indicating continued foreign investor confidence in the Indian market.
The emergence of retail investors has played a significant role in counterbalancing FPI outflows, with domestic mutual funds and direct retail investors increasing their free float ownership of NSE listed companies. This has reduced the influence of FPI flows in the market, according to industry experts.
