FPIs Invest Rs 12,262 Crore In Indian Stocks In August 2023; September Starts With A Bang

Foreign portfolio investors (FPIs) ended August month as net buyers with an inflow of Rs 12,262 crore which also included bulk deals and investments in primary markets. However, FPIs were net sellers of Rs 20,620 crore in the cash market during August. Consistent buying was seen in capital goods stocks. However, FPIs have kickstarted September with a bang as they bought Rs 1,259 crore worth of equities in the first trading session (September 1).

Data from NSDL showed that FPIs invested Rs 12,262 crore in Indian stocks, the highest investment compared to other instruments such as an inflow of Rs 7,733 crore in debt, and Rs 1,276 crore in hybrids. However, FPIs were sellers with an outflow of Rs 2,933 crore in debt-VRR options.

Overall, in the Indian market during August 2023, FPIs pumped in Rs 18,338 crore including equities, debt, debt-VRR, and hybrid instruments.

Talking about August month's performance of FPIs in Indian stocks, Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "FPIs invested Rs 12262 crores in August. This figure includes bulk deals and investments through the primary market. In the cash market FPIs were sellers after three months of sustained buying. In August FPIs sold stocks for Rs 20620 crores in the cash market. Rising bond yields in the US and strong dollar index are negative for capital flows."

He added this is the primary reason why FPIs have been sellers in the cash market. FPIs have been sellers in most emerging markets in August mainly due to this double whammy of rising dollar and rising bond yields. Profit booking in financials also contributed to FPI selling.

Regarding sector-specific investments, Vijayakumar added, that FPIs have been consistently buying capital goods. Recently, they have been buyers in health care, too.

The latest jobs report from the U.S. indicates that the U.S. economy is slowing and, therefore, the Fed might not raise rates again. This can bring down the US bond yields and the dollar index. If this scenario unfolds, FPIs may again turn buyers in India, he said.

Meanwhile, on September 1st, FPIs invested Rs 1,259 crore in Indian equities.

In July 2023, FPIs invested Rs 46,618 crore worth of equities, making it the second-highest monthly buying of 2023 after June 2023 where it invested Rs 47,148 crore in shares.

In August, Sensex shed 1,072.15 or 1.61%, while Nifty 50 tumbled by 298.25 points or 1.51%.

In the trading week from August 28 to September 1, Sensex and Nifty 50 have gained by a per cent.

Year-to-date, FPIs are broadly net buyers of Indian equities with an inflow of Rs 1,36,546 crore.