FPIs invest ₹10,690 cr in Indian equities this month, sell ₹15,817 cr in cash market; check short-term negatives
Foreign portfolio investors (FPIs) performance remains muted on D-Street so far in August due to the rising US bond yields and stronger US dollar, after sustained buying in the last three months. FPIs bought ₹10,690 crore worth of Indian equities and infused a total of ₹14,766 crore as of August 26, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL ) data. The ₹10,690 crore-figure also includes bulk deals and investment in primary market.
In the cash market FPIs sold Indian stocks worth ₹15,817 crore so far this month. Strength in the US dollar index at well around 104 and the US 10-year bond yield remaining around 4.25 per cent are short-term negatives for FPI flows to emerging markets like India, according to analysts. ‘’The consolidated NSDL data shows the August FPI investment through 26th at ₹10,689 crore.
But this figure includes investment through the primary market and bulk deals, which have been gathering momentum recently…An important feature of FPI investment is their consistent buying in capital goods. And, of late, they have started selling in financials,'' said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
In view of the strong dollar and rising US bond yields, FPIs are likely to continue selling in the cash market in the near-term. The recent volatility in FPI flow is also attributed to renewed fear of the Fed hiking rates further in its next policy in September, according to analysts. ‘’The poor monsoon in August and its skewed spatial distribution may keep inflation elevated, and this is becoming an area of concern impacting sentiments in the market.
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