FPIs turn buyers in November after 2 months of outflow, inflows in debt market highest in 2023; will the trend continue?

livemint.com:

Indian equities in November as US treasury bond yields declined after rising to a peak in October. FPIs bought Indian equities worth ₹9,001 crore after selling shares worth ₹24,548 crore in October and ₹14,767 crore in September, data with the depositories showed. Following FPI turning buyers again in November, the Indian equity market ended the month with strong gains.

This surge was fueled by an uplift in sentiment driven by a decline in US yields, and hopes of a peak in interest rates in the US, coupled with strong economic growth in India. Sensex rose 4.9 percent while the Nifty 50 jumped 5.5 percent in November. This was Nifty's best month since July 2022.

For the Sensex, it was the best month since October 2022. "The better-than-expected decline in inflation in mid-October US has given the market confidence to assume that the Fed is done with a rate hike. Consequently, the US bond yields have declined sharply with the 10-year benchmark bond yield correcting from 5 percent in mid-October to 4.40 percent now.

This has forced FPIs to slow down their selling," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said. Before the outflow started in September, FPIs were consistent buyers of Indian equities for six months from March to August and bought shares worth ₹1.74 lakh crore in this period. FPIs infused ₹12,262 crore in August.

Meanwhile, the net inflow was at ₹46,618 crore in July, ₹47,148 crore in June, and ₹43,838 crore in May. Before that, ₹11,631 crore was infused in Indian equities in April and ₹7,935 crore in March, data with the depositories showed. However, in the first 2 months of the current calendar year, FPI investments were in the red.