FPIs pump over Rs. 57,000cr into Indian equities in December
What's the story
In December, foreign portfolio investors (FPIs) made a significant turnaround, becoming net buyers in India's stock market after a selling streak in November.
This shift was fueled by strong global cues, as the US Federal Reserve indicated an end to its tightening cycle and raised hopes for a rate cut in March 2024.
As a result, there was a decline in US bond yields, prompting an influx of foreign funds into emerging markets such as India.
Details
Banking and IT stocks attract FPIs
As of December 22, FPIs have invested Rs. 57,313 crore in Indian equities, with total inflows reaching Rs. 77,388 crore across debt, hybrid, debt-VRR, and equities, as per National Securities Depository Ltd (NSDL) data.
Analysts noted substantial stock purchases in the banking and IT sectors by FPIs.
The steady decline in US bond yields has caused this sudden change in the strategy of FPIs, says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
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FPI activity overview and November inflows
FPIs had been net sellers from August to October due to a sharp increase in US bond yields and geopolitical tensions in the Middle East.
However, they became net buyers again on November 15 and 16.
During August, September, October, and until November 15, FPIs sold a cumulative Rs. 83,422 crore worth of stocks through exchanges.
In November alone, FPI inflows into Indian equities reached Rs. 9,001 crore, compared to Rs. 39,000 crore worth of shares sold in September-October.