FPIs Sell Rs 2,034 Crore In Indian Stocks From August 1-4; Invests Rs 46,618 crore In July

With markets ending in red for the second straight week, foreign portfolio investors (FPIs) have also changed the course of their sentiment in Indian equities. After buying for five months straight, FPIs started August 2023 as net sellers with outflow of Rs 2,034 crore recorded in domestic stocks from August 1st to 4th. In July, FPIs made their second-highest monthly buying of 2023 to the tune of Rs 46,618 crore in equities.

As per NSDL data, FPIs selling stood at Rs 2,034 crore in Indian equities from August 1st to 4th. While they held an appetite for the debt market an inflow of Rs 1,151 crore has been recorded during these days. FPIs were also sellers of debt-VRR to Rs 177 crore but were buyers of hybrid instruments to Rs 651 crore.

In the previous month, FPIs bought 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.

On FPI's performance, Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "After sustained buying for three months, FPIs have turned sellers in the Indian market. During the last seven trading sessions, FPIs sold stocks worth Rs 8545 crores in the cash market. Sharp spike in the U.S. 10-year bond yield above 4% is a near-term negative for capital flows to emerging markets."

He explained that during the last three months, FPIs have been sustained buyers in the Indian market having invested a cumulative amount of Rs 137603 crore ( Source: NSDL ). If the US bond yields remain high FPIs are likely to continue selling or at least refrain from buying.

Also, Vijayakumar said, "FPIs continued to buy autos, capital goods and financials. A significant change in FPI strategy is that they have started buying IT stocks, which they have been selling earlier. This explains the strength in IT stocks recently."

On Friday, Sensex ended at 65,721.25, up by 480.57 points or 0.74%. Nift 50 settled at 19,517, surging by 135.35 points or 0.7%.

In the trading week that ended on August 4th, Sensex dipped by 484.04 points or 0.73%, while Nifty 50 tumbled by 115.30 points or 0.59% -- making it the second consecutive bearish week.

Talking about this week's market performance, Vinod Nair, Head of Research at Geojit Financial Services said, "The week began on a positive note, with hopes of an end to the policy tightening era due to cooling inflation worldwide. However, negative news about the US rating downgrade, weak factory activity data from the Eurozone and China, and prolonged FII selling triggered by rising US bond yields caused widespread worries across the globe. Increased concerns over the US economy forced investors to flee in search of safe haven investments, leading to a surge in the dollar index. Nonetheless, the domestic market recovered from the impact of weak global cues, gaining support from positive domestic earnings led by IT and pharma stocks. India's manufacturing activity remained robust, although it marginally moderated for the second consecutive month in July. On the other hand, the domestic service PMI exceeded market expectations, reaching a 13-year high, driven by a rise in new orders, particularly in international sales."

Going ahead, Nair said, "Investors are awaiting the upcoming MPC meeting, where the RBI is expected to maintain its policy rates at 6.5%."

Year-to-date, FPIs are broadly net buyers of Indian equities with an inflow of Rs 1,20,991 crore.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns. in advises users to consult with certified experts before making any investment decision.