Nifty @ record high: Foreign investors pour in nearly $3 billion on Dalal Street this week

economictimes.indiatimes.com:

Nifty scaled new all-time peaks, foreign institutional investors or FIIs invested about $2.7 billion on Indian stocks in just 5 trading days of this week. The fresh round of inflow comes in even as 93% of Wall Street traders are presuming that the US Fed will hike interest rates by 25 basis points during the FOMC meeting on July 25-26. If this trend continues, monthly FII flows in July will exceed the figures in May and June, which were $5.3 billion and $5.7 billion, respectively.

“This ‘U’ turn in FII flows which were negative in January and February this year has been the primary driver of the strong rally that we are witnessing in the market since the lows of March,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. Last month, financial services sector saw net inflows of Rs 19,229 crore ($2.3 billion), which is nearly 9% higher from May.

The sector which saw the second highest inflows in June from FPIs was automobiles and auto ancillaries at Rs 5,821 crore. However, this was lower than the Rs 8,700 crore of inflows witnessed in May. “FII strategy is focussed more on country-specific factors rather than sectoral prospects within a country.

That’s why they adopted the ‘Sell India, Buy China’ strategy in Jan and February. During these 2 months, FIIs sold financial services for Rs 15,744 crores. Now, pursuing the ‘Sell China, Buy India’ strategy, the same FIIs have bought stocks in financial services for Rs 19,229 crores in June alone and this buying trend continues,” Vijayakumar said.