New Delhi [India], Foreign Portfolio Investment (FPI) in the Indian stock market turned positive in June with net investment of Rs 12,170 crore, according to NSDL data.
The data highlights that as of June 21, the FPIs had injected this amount into the stock market for the month. However, overall net investment for calendar year 2024 remains negative, with net sales amounting to Rs 11,194 crore.
In the last trading session of the previous week, FPIs invested Rs 2,250.20 crore in the Indian markets. The change in the FPI's behavior has been particularly notable since June 10, influenced by the election results.
"Foreign portfolio investors (FPIs) have altered their position in the stock market following the election results, pumping in Rs 23,786 crore since June 10. There are three main reasons for this positive inflow. First, the continuity of the Government assures ongoing reforms. Second, the Chinese economy is slowing, as evidenced by a 12 percent drop in copper prices over the last month. Third, certain block agreements in the market have been enthusiastically adopted. by FPIs," said Sunil Damania, chief investment officer, MojoPMS.
On the contrary, in May FPIs withdrew Rs 25,586 crore from the stock market, while in April they were net sellers with a withdrawal of Rs 8,671 crore. This trend of capital outflows had created an environment of caution in the market.
Market experts point out that the recent FPI inflows are concentrated in a few select stocks rather than spread across the entire market or sectors. They believe that the high valuations currently demanded by the Indian stock market will limit FPI inflows. While June numbers show positive net investment, the overall sentiment among FPIs remains one of cautious optimism, tempered by valuation concerns.
This strategic approach of foreign investors highlights their close monitoring of economic indicators and government steps ahead of the budget presentation. As the year progresses, the balance of net investments will likely depend on the evolution of these factors, particularly in the context of global economic conditions and the continuity of domestic policies.
The data highlights that as of June 21, the FPIs had injected this amount into the stock market for the month. However, overall net investment for calendar year 2024 remains negative, with net sales amounting to Rs 11,194 crore.
In the last trading session of the previous week, FPIs invested Rs 2,250.20 crore in the Indian markets. The change in the FPI's behavior has been particularly notable since June 10, influenced by the election results.
"Foreign portfolio investors (FPIs) have altered their position in the stock market following the election results, pumping in Rs 23,786 crore since June 10. There are three main reasons for this positive inflow. First, the continuity of the Government assures ongoing reforms. Second, the Chinese economy is slowing, as evidenced by a 12 percent drop in copper prices over the last month. Third, certain block agreements in the market have been enthusiastically adopted. by FPIs," said Sunil Damania, chief investment officer, MojoPMS.
On the contrary, in May FPIs withdrew Rs 25,586 crore from the stock market, while in April they were net sellers with a withdrawal of Rs 8,671 crore. This trend of capital outflows had created an environment of caution in the market.
Market experts point out that the recent FPI inflows are concentrated in a few select stocks rather than spread across the entire market or sectors. They believe that the high valuations currently demanded by the Indian stock market will limit FPI inflows. While June numbers show positive net investment, the overall sentiment among FPIs remains one of cautious optimism, tempered by valuation concerns.
This strategic approach of foreign investors highlights their close monitoring of economic indicators and government steps ahead of the budget presentation. As the year progresses, the balance of net investments will likely depend on the evolution of these factors, particularly in the context of global economic conditions and the continuity of domestic policies.
