According to data with depositories, foreign investors have turned net buyers and invested a net amount of Rs 4,989 crore in Indian equities in July. Foreign portfolio investors (FPIs) turned net buyers for the first time in July after nine straight months of massive net outflows, which started in October last year.
Between October 2021 till June 2022, they sold Rs 2.46 lakh crore in the Indian equity markets. This was the highest net outflow since March 2020, when FPIs had pulled out Rs 61,973 crore from equities.
Hitesh Jain, Lead Analyst – Institutional Equities, Yes Securities, believes that FPI flows to remain positive during August as the worst for the rupee seems to be over, and oil seems to be confining in a range. “Also, earnings story still remains strong where sturdy revenue growth is offsetting contraction in profit margins,” he added.
Additionally, the recent correction in the Indian equity markets has also provided a good buying opportunity, and FPIs have been taking advantage of the same by hand-picking high-quality companies. However, FPIs pulled out a net amount of Rs 2,056 crore from the debt market during the month under review.
Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, said that this reversal in net outflows cannot be construed as a change in trend or consider that FPIs have made a complete comeback. While it is a welcome shift from foreign investors, the scenario continues to evolve at a fast pace, and it may take a while for clarity to emerge.
