Shutterstock.comNEW DELHI: An old Wall Street adage, ‘Sell in May and go away’ did play out on Dalal Street last month, but with a twist.
FPIs, who sold equities worth $397 million in May, actually bought $479 million worth of shares in the second half of the month, after selling shares worth $876 million in the first half.
FPIs were seen buying high beta stocks and investing in the reopening theme during the month, even as they dumped defensive plays, as a steep decline in daily in Covid cases rekindled hopes of a quicker-than-expected recovery in the latter half of the month.
Data showed FPIs added bank and financial stocks to the tune of $924 million (nearly Rs 6,750 crore) in the second half of May after selling $260 million worth of BFSI shares in the first half.
Overall, the banking and financial sector attracted $666 million in FPI inflows during the month.
The second half of May saw a rejig in MSCI indices, which probably led to $250 million inflows, Edelweiss Securities said.
A rally in BFSI names helped Nifty50 climbed 6.5 per cent in May.
Metals & mining saw some $160 million FPI inflows, power sector received $124 million, reopening bet auto drew $99 million while logistics received $64 million.
On the flip side, defensives such as IT ($415 million outflow), insurance ($372 million), telecom ($237 million) and oil & gas ($230 million) were among the sectors that saw FPI outflows.
The media sector saw an outflow of $157 million and this major outflow can be attributed to the exclusion of from the MSCI Standard Index.
"A look at the May price action from a binary lens shows that the drop in daily Covid caseload, improvement in recovery rates and pickup in the pace of vaccination drive are bolstering investor hopes that the economy would stage a faster recovery than what was anticipated earlier," said.
In rupee terms, FPIs were net sellers of Rs 2,954 crore worth of shares in May after taking out some Rs 9,659 crore in April.
VK Vijayakumar, Chief Investment Strategist at , said there was a sudden turnaround in FPI strategy during the last two weeks.
"Starting early April till mid-May, FPIs were consistent sellers in India. Perhaps the second wave of Covid-19, the consequent widespread restrictions on economic activity and its potential impact on growth and corporate earnings unnerved them. They moved money to other emerging markets. But the sheer momentum in Indian market has forced FPIs to change that strategy and come back,” he said.
Vijayakumar said since Mid-May, FPIs have turned net buyers, having bought stocks worth Rs 7,967 crore till June 4.
"Globally, stock markets have been unusually stable and resilient. This trend is likely to change when there are indications of a change in the US Fed’s ultra-loose monetary policy,” he said.
FPIs, who sold equities worth $397 million in May, actually bought $479 million worth of shares in the second half of the month, after selling shares worth $876 million in the first half.
FPIs were seen buying high beta stocks and investing in the reopening theme during the month, even as they dumped defensive plays, as a steep decline in daily in Covid cases rekindled hopes of a quicker-than-expected recovery in the latter half of the month.
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View Latest Stock Report »Data showed FPIs added bank and financial stocks to the tune of $924 million (nearly Rs 6,750 crore) in the second half of May after selling $260 million worth of BFSI shares in the first half.
Overall, the banking and financial sector attracted $666 million in FPI inflows during the month.
The second half of May saw a rejig in MSCI indices, which probably led to $250 million inflows, Edelweiss Securities said.
A rally in BFSI names helped Nifty50 climbed 6.5 per cent in May.
Metals & mining saw some $160 million FPI inflows, power sector received $124 million, reopening bet auto drew $99 million while logistics received $64 million.
On the flip side, defensives such as IT ($415 million outflow), insurance ($372 million), telecom ($237 million) and oil & gas ($230 million) were among the sectors that saw FPI outflows.
The media sector saw an outflow of $157 million and this major outflow can be attributed to the exclusion of from the MSCI Standard Index.
"A look at the May price action from a binary lens shows that the drop in daily Covid caseload, improvement in recovery rates and pickup in the pace of vaccination drive are bolstering investor hopes that the economy would stage a faster recovery than what was anticipated earlier," said.
In rupee terms, FPIs were net sellers of Rs 2,954 crore worth of shares in May after taking out some Rs 9,659 crore in April.
VK Vijayakumar, Chief Investment Strategist at , said there was a sudden turnaround in FPI strategy during the last two weeks.
"Starting early April till mid-May, FPIs were consistent sellers in India. Perhaps the second wave of Covid-19, the consequent widespread restrictions on economic activity and its potential impact on growth and corporate earnings unnerved them. They moved money to other emerging markets. But the sheer momentum in Indian market has forced FPIs to change that strategy and come back,” he said.
Vijayakumar said since Mid-May, FPIs have turned net buyers, having bought stocks worth Rs 7,967 crore till June 4.
"Globally, stock markets have been unusually stable and resilient. This trend is likely to change when there are indications of a change in the US Fed’s ultra-loose monetary policy,” he said.
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