FPIs pump in Rs. 35,000cr in Indian equities this March
In a significant market shift, foreign portfolio investors (FPIs) have become net buyers in March 2024, injecting Rs. 35,098 crore into Indian equities. This surge was observed across various sectors including capital goods, automobiles, financials, telecom, and real estate. Despite some late selling in the month, activity levels were notably higher than the subdued performance seen in January and February.
FPIs' investment pattern in early 2024
In the first two months of 2024, FPIs were net sellers, offloading equities worth Rs. 25,744 crore in January and making purchases of only Rs. 1,539 crore in February. However, their cumulative acquisition of domestic shares so far this year amounts to Rs. 10,893 crore. V K Vijayakumar from Geojit Financial Services described these FPI flows as "erratic in nature."
FPIs' confidence in Indian debt instruments
Over the past three months, FPIs have invested Rs. 55,800 crore into Indian debt instruments. Alok Agarwal from Alchemy Capital Management noted that the inflows for FY24 have been strong, indicating sustained confidence among foreign investors toward the Indian market. Despite this, it's worth noting that FPIs remained net sellers in the IT sector.
Retail investors offset impact of FPI outflows
Agarwal also highlighted the significant role played by retail investors in offsetting the impact of FPI outflows. He observed that domestic mutual funds and retail investors have notably increased their free float ownership in NSE-listed companies. This suggests a strong domestic investor base supporting the Indian equity market despite fluctuations in foreign investments.
March market performance: Nifty indexes rise
In terms of market performance for March, the Nifty index rose by 1.6%, closing at 22,327 while the Nifty Bank increased by 2.2%, ending at 47,125. However, both the mid-cap index and small-cap index experienced losses of 0.5% and 4.4%, respectively. This mixed performance reflects the varied impact of FPI inflows across different sectors and market segments.
