Foreign investors’ net investment (FPI) in Indian stocks has hit a six-month high since May, with analysts saying the momentum is expected to continue thanks to growing favor for Indian stocks.
Following a net sale of Indian equities in the first two months of 2023, FPIs have netted a net investment of 23,152 crore in shares as of May 12, bringing their total net investment for the month to 22,902 crore – the same level highest in 6 months.
FPIs were net buyers of shares on all days of the month, with the highest stock worth Rs 6,469 crore being purchased on the first trading day, May 2. FPIs netted a net buy of shares worth 11,631 crore Rs in April, when net investments stood at ₹13,545 crore.
Industry Betting
Previously, FPI’s net investments were the highest in November 2022, in which they invested 36,239 crore in shares, bringing the total investment for the month to 33,847 crore. FPIs have sold Indian shares due to higher valuations relative to other markets, analysts said, however, there is now a shift in favor of India as an emerging market destination. due to the country’s strong macroeconomic conditions.
“Finance continues to be FPI’s favorite area. They are also buyers of capital goods and automobiles. VK Vijayakumar, Director of Investment Strategy at Geojit Financial Services, said that as the rupee is strong and the dollar is expected to fall in the near term, FPIs are likely to continue buying in India.
So far in 2023, FPIs have net bought Indian stocks worth 8,572 crore, as part of a total net investment of 11,663 crore.
Main driver
Market participants say less likely future rate hikes by the US Federal Reserve, stability in the US financial services sector, and expectations of high ROE and visibility. Earnings growth by Indian firms is driving current outflows, market participants said, adding that Indonesia, Thailand and China are also attracting inflows amid fears of a slowdown. Global.
In India, domestically driven economic sectors such as capital goods, electricity, sugar cane, finance, industry, real estate, building materials, automobiles and chemicals can receive multiple streams. foreign investment capital.
