FPI activity muted in August so far, offload ₹2,034 crore in Indian equities; July inflow lower than June

livemint.com:

Foreign portfolio investors (FPIs) started August on a subdued note, while the inflows by the end of July came in lower than June 2023. FPIs sold ₹2,034 crore in Indian equities so far in August and infused a total of ₹46,618 crore in Julytaking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL ) data. During the last seven trading sessions FPIs sold stocks worth ₹8,545 crore in the cash market, according to analysts.

Even though FPIs recorded their fifth straight monthly buying in the Indian markets last month, it was slightly less that ₹47,148 crore in June – which was the highest monthly FPI inflow since August 2022. Sustained FPI inflows have powered the uptick in the blue-chip Nifty 50 and S&P BSE Sensex, driving the benchmarks to record highs in July. Commenting on the FPI activity, Dr.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services says, ‘’After sustained buying for three months, FPIs have turned sellers in the Indian market…Sharp spike in the US 10-year bond yield above four per cent is a near term negative for capital flows to emerging markets.'' ‘’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,'' added Dr. V K Vijayakumar.

Between March and July, FPIs have been net buyers of Indian equities in each of the five months, purchasing shares worth ₹15,530,800 crore and triggering a 14.15 per cent rise in Nifty 50 index. Analysts attributed strong macroeconomic fundamentals, steady earnings as well as concerns over recovery in China as the key drivers of foreign inflows into India. Earlier in the week, global brokerage