FPIs' Bullish July Investment in Equities
Foreign investors from other countries, known as Foreign Portfolio Investors (FPIs), kept investing in Indian stocks in July.
Foreign investors from other countries, known as Foreign Portfolio Investors (FPIs), kept investing in Indian stocks in July. They added a total of Rs 45,365 crore to the Indian equity markets. This happened because the overall economic situation in India was stable, and companies were reporting steady earnings growth.
However, before the meeting of the US Federal Reserve, FPIs started selling some of their stocks. The US Fed hinted that interest rates might increase in the future, which made foreign investors reevaluate their investment choices.
FPIs have been continuously buying Indian stocks since March, and they have invested a total of Rs 1.36 lakh crore in the last three months (from May to July). This is a significant increase compared to the beginning of the year when they withdrew Rs 34,626 crore in January and February.
An interesting thing about FPIs is that their decision to buy or sell stocks is influenced by various external factors like the US dollar index, US bond yields, and global market trends, in addition to the Indian economic conditions.
Despite the buying spree, FPIs' investments are subject to change based on market conditions. For instance, they have been buying and selling certain financial stocks in different periods of 2023.
The Indian economy's stability makes it an attractive investment destination for FPIs, and they continue to show interest in the Indian stock market.
Apart from equities, FPIs also invested Rs 3,340 crore in the Indian debt market during the same period.
The sectors that received the most FPI investment were financials, automobiles, capital goods, real estate, and FMCG (Fast-Moving Consumer Goods).
Overall, FPIs have contributed Rs 1.22 lakh crore to the Indian equity market and over Rs 20,000 crore to the debt market so far this year.
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