Home ›› 11 Apr 2022 ›› Asia Biz
After a six-month selling spree, foreign investors have turned net buyers in April so far by infusing ₹ 7,707 crore in Indian equities as a correction in markets provided them with a good buying opportunity.
Himanshu Srivastava, Associate Director - Manager Research, Morningstar India, said it would still be slightly premature to call it a change in trend concerning FPI flows. Hence, it will be prudent to watch how the scenario unfolds over the next few weeks or months to get more clarity, reports NDTV.
According to the latest data with the depositories, foreign portfolio investors (FPIs) have made a net investment of ₹ 7,707 crore in Indian equities during April 1-8.
Srivastava said the inflow indicates that maybe foreign investors are almost done with the recalibration exercise of their portfolios owing to the current scenario. Also, he added that the recent correction in the equity markets had opened investment opportunities, which FPIs would have sought as a good entry point.
However, they were net sellers during the last two trading sessions, suggesting that there is still a lack of certainty on the direction of FPI flows.
The latest inflow comes following massive net outflows of ₹ 1.48 lakh crore from equities in the last six months, from October 2021 to March 2022.
These were mainly on the back of anticipation of a rate hike by the US Federal Reserve and later due to the deteriorating geopolitical environment following Russia’s invasion of Ukraine.
Apart from equities, FPIs put in ₹ 1,403 crore in the debt markets during the period under review after pulling out a net ₹ 8,705 crore in the last two months (February and March).
The fund infusion could result from foreign investors parking their investments from a short-term perspective or a tactical investment. The continuity of net inflow into the segment needs to be gauged over a period to call it a change in trend, Srivastava noted.
