FPIs turn net sellers in August, offload over ₹7,000 crore after 3-month rally; analysts see profit-booking

livemint.com:

Foreign portfolio investors (FPIs) performance remains muted on D-Street so far in August, far lower than the inflows sustained in the last three months. FPIs bought ₹3,272 crore worth of Indian equities and infused a total of ₹6,241 crore as of August 11, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL ) data. Month till-date, FPIs have sold Indian stocks to the tune of ₹7,543 crore, according to analysts.

However, FPIs continue to invest in capital goods and selectively in IT. However, the trend of FPI selling in August has been countered by strong buying led by domestic institutional investors (DIIs). FPIs recorded their fifth straight monthly buying in the Indian markets during July 2023 - 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. ‘’FPI became net buyers with an inflow of $11.9 billion in the April-June quarter compared to an outflow of $14.4 billion in the corresponding quarter of the previous year. Among the sectors, financial services, automobiles, FMCG, and healthcare saw increased interest from foreign investors,'' said the Finance Ministry in its monthly economic review for June 2023.

Analysts also reckon that after stock markets scored record gains in the past three months, some profit-booking by the FPIs now can be expected. "After three months of sustained buying with cumulative investment of ₹13,7603 crore, FPIs have turned sellers in India. In August through 11th FPIs have sold stocks to the tune of ₹7,543 crores.