FPIs turn net buyers in August, pump in Rs 975 cr in first week of Aug

Foreign Portfolio Investors (FPIs) were net buyers to the tune of Rs 1,210 crore in the first five trading sessions of the month of August amid domestic factors. 

As per depositories data, they invested Rs 975 crore in equities between August 2-6, whereas in the debt segment the overseas investors infused Rs 235 crore. 

This took the overall net investment during the said period to Rs 1,210 crore. FPIs were net sellers at Rs 7,273 crore in July. 

Shrikant Chouhan, executive vice president, equity technical research at Kotak Securities told PTI that markets were bolstered by a set of domestic indicators such as "recovery in PMI prints, lower unemployment rate in CMIE surveys and recovery in GST receipts, even as concerns over the third wave lingered in global markets."

Also Read: FPIs withdraw over Rs 6,000 cr from Indian equities so far this fiscal

However, Himanshu Srivastava, associate director - manager research, Morningstar India pointed that this does not indicate a change in trend yet.

"Higher valuations, surge in oil prices and firmness in US Dollar have been keeping FPIs away from Indian equities. They have also been booking profits at regular intervals with markets trading near all-time highs," he added.

"The return of FPIs has triggered renewed interest in large-caps," noted VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Overall, the MSCI Emerging Markets Index has gained 1.51 per cent this week, Chouhan said.

All key emerging markets and Asian markets have seen FPI inflows in this month to date except Thailand.

Taiwan, South Korea, Indonesia and the Philippines saw month to date FPI inflows of $2,588 million, $1,722 million, $93 million and $8 million, respectively.

Also Read: Investment in P-notes continues to surge; hits 37-month high in June

On the flip side, Thailand saw month to date FPI outflows of $182 million, he added.

Regarding the future of FPI flows, Srivastava said India remains an attractive investment destination from the long-term perspective. 

As the macro environment improves and the domestic economy starts treading on the recovery path, FPI flows can be expected to rebound.

However, the risk of a potential third wave could be a deterrent for foreign investors.

Also, given high valuations, interim profit booking cannot be ruled out while dollar movement will also continue to impact foreign flows into the Indian equities, Srivastava noted.

(With inputs from PTI.)