FPIs taper off selling in Indian equities in February
₹4,919 crore from Indian stock markets, a marked decrease from the ₹29,177 crore divested in the 15 days through 31 January, according to data from the National Securities Depository Ltd (NSDL). Financials services saw the most selling, with FPIs dumping stocks worth ₹7,536 crore, primarily driven by a decline in HDFC Bank shares after the lender reported a year-on-year net interest income growth of 24% to ₹28,470 crore, falling short of market expectations. Here as well, the selling moderated from the previous fortnight when ₹31,261 crore worth of shares were liquidated.
"There has been a slowdown in selling by FPIs with banks like HDFC (Bank) falling from ₹1,700 to ₹1,400 levels, at which the lender is getting support," said SK Joshi, ED, Khambatta Securities. "They are on wait-and-see ahead of the general elections' outcome in May." The construction sector followed, with disposals amounting to ₹4,251 crore, along with telecom and fast-moving consumer goods sectors, witnessing sales of ₹3,766 crore, and ₹3,011 crore, respectively. Despite these outflows, the Nifty Index managed to climb 0.98% to 21,910.75 in the same period.
The Indian market's robust performance until recently has been buoyed by strong investments from both domestic and foreign institutional investors. In 2023, FPIs net invested ₹1.71 trillion into Indian shares, with domestic institutional investors contributing ₹1.85 trillion. So far in the current calendar year, FPIs have net sold shares worth ₹26.374 crore.
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