‘Resilience of Indian stock market forced foreign portfolio investors to turn buyers’

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New Delhi: The resilience of the Indian stock market and the improving macros of the Indian economy forced the foreign portfolio investors (FPIs) to turn buyers in India, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The distinct trend in FPI flows this year is the erratic nature of equity flows in contrast to the steady positive trend in debt inflows. The year began with equity outflows of Rs 25,743 crore in January which turned into a mild positive inflow of Rs 1538 crore in February and a sharp spurt to Rs 35,098 crore inflows in March, he said. ()

FPIs were big buyers in capital goods, automobiles, financials, telecom and real estate. They were sellers in IT. FPI inflow into debt has been steady this year and has reached an impressive figure of Rs 55,857 crore in 2024 so far, he added. ()

Alok Agarwal, Head Quant & Portfolio Manager, Alchemy Capital Management, said Foreign Portfolio Investment (FPI) holdings in the Indian market has dropped to a decadal low of 16.6 per cent in 2023, largely due to a selloff triggered by portfolio underperformance and a spike in US bond yields. Despite the drop, FPI inflows in FY24 remained robust, indicating continued foreign investor confidence in the Indian market.

Additionally, the emergence of retail investors in the Indian stock market has played a crucial role in counterbalancing the impact of FPI outflows, with domestic mutual funds and direct retail investors significantly increasing their free float ownership of NSE listed companies, thereby reducing the influence of FPI flows, he said.