FPIs start August as sellers, offload ₹1,027cr in equities
Foreign portfolio investors (FPIs) have started August on a selling spree of Indian equities. In the first two trading sessions of the month, they offloaded shares worth ₹1,027 crore. This move marks a shift from their buying trend in June and July, when they purchased domestic shares amounting to ₹26,565 crore and ₹32,365 crore, respectively. Despite this recent sell-off, their total investments for 2024 remain substantial at ₹34,539 crore.
Inconsistent investment behavior in Indian equities
The investment behavior of FPIs in the Indian equity market has been inconsistent this year. They began 2024 as net sellers, offloading shares worth ₹25,744 crore in January. However, they reversed this trend by becoming net buyers in February and March, with purchases of ₹1,539 crore and ₹35,098 crore, respectively. This inconsistency continued into April and May when they again turned into net sellers, selling equities worth ₹8,671 crore and ₹25,586 crore, respectively.
FIIs and DIIs show contrasting trends
On the final trading day of the week, foreign institutional investors (FIIs) followed a similar trend to FPIs by becoming net sellers at ₹3,310 crore. In contrast, domestic institutional investors (DIIs) were net buyers at ₹2,965.94 crore. This divergence in investment behavior between foreign and domestic investors, highlights the varying market sentiments prevalent among these investor groups.
Expert analysis on FPI investment
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the inconsistent FPI investment. He contrasted this with the consistent buying by DIIs. Vijayakumar also pointed out potential developments that could impact FPI flows, such as a possible US recession due to rising unemployment. He suggested that these factors might lead to a rate cut by the US Federal Reserve in September, and a drop in the US 10-year bond yield to 3.79%.
