FPI Record Highest Purchases In Indian Shares In Six Months During First Half Of May, Reveals NSDL

Foreign portfolio investors (FPIs) continued to buy Indian equities in the new fiscal year, buying shares worth Rs 24,939 crore on a net basis in the first half of May, according to National Securities Depository Ltd (NSDL) statistics released on Monday.

This was the largest purchase by FPIs in six months, dating back to November 2022. In fact, FPIs purchased Indian shares in all nine sessions during the first half of May.

Foreign institutional investors (FIIs) were net buyers in March and April, owing largely to GQG Partners' $1.87 billion investment in four Adani Group companies and consistent quarterly profitability.

The benchmark Nifty 50 surged 1.85 percent in the first half of May, powered by FPI inflows, which drove the advance in domestic shares.

According to two analysts, the revived interest from FPIs is partly fueled by India's solid macroeconomic metrics, such as healthy goods and services tax collections and a drop in inflation.
FPIs purchased Rs 8,382 crore in financial services shares in May, after selling Rs 29,993 crore in financial services shares in FY2023.

In April, FPIs invested Rs 7,690 crore in the sector.

"Earnings momentum continued for the banking sector in March quarter, and aided sentiment in the markets," said analysts at Motilal Oswal Financial Services in their interim review of the earnings season.

Automobiles, oil and gas, healthcare, and fast moving consumer goods were all purchased in May, but information technology sold. According to analysts, the upheaval in the US banking system and slowness in technology spending by clients in the US and Europe impacted profitability of IT companies, sparking FPI selling in the sector.