Foreign Portfolio investors (FPI) have inused Rs 7,200 crore into the Indian share markets thus far this month, mainly driven by bulk investment in the Adani Group companies by the US-based GQG Partners.
FPIs are likely to be cautious in the near term since there is a risk-off sentiment in equity markets globally due to the stress in the US banking system and the crash in banking stocks, as per VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The stress appeared in the US banking system after the collapse of Silicon Valley Bank and Signature Bank earlier this month. Most global equity markets witnessed a sharp recovery, even as macro sentiments remained volatile as frailties in European and US banks were under focus. "On the economy front, the US Federal Reserve increased the Federal Fund rates by 25 basis points while voicing confidence in the stability of the US financial system. FPIs flow are expected to remain volatile given the tight central bank monetary policy," Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said.
As per the data with the depositories, foreign portfolio investors (FPIs) invested Rs 7,233 crore in Indian equities till March 25. This came after a net outflow of Rs 5,294 crore in February and Rs 28,852 crore in January. Prior to that, FPIs infused a net amount of Rs 11,119 crore in December, data showed. The inflow in March is inclusive of the bulk investment of Rs 15,446 crore by GQG in the four Adani stocks, Vijayakumar said.
Excluding this, Foreign Portfolio investorsactivity in equities represents a strong selling undercurrent. In the calendar year 2023, FPIs have sold equities to the tune of Rs 26,913 crore.
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