1 week ago
Foreign Investors Sustain Indian Equity Buying on Growth Hopes
Foreign investors continued putting money into Indian companies.
They invested Rs 23,543 crore by August 22.
Experts think India’s economic growth and company earnings may improve.
A stable rupee is also helping attract investors.
Some foreign investors moved away from a global technology-focused trade and looked at Indian companies instead.
They preferred certain mid-sized companies, rather than many large banking and IT stocks.
However, high US bond yields can make shares less attractive.
Indian markets were bumpy during the week and finished mostly flat.
Investors are watching oil prices, the rupee, foreign investment and signals from the US Federal Reserve.
FPIs bought Rs 23,543 crore of Indian equities through August 22.
Stock exchanges received Rs 14,117 crore, while primary markets and other categories received Rs 9,426 crore.
Analysts attributed the buying to stronger GDP prospects, improving earnings, rupee stability and a shift away from the global “chip trade.”
FPIs selectively bought mid-cap stocks rather than attractively valued large banking and IT stocks, despite elevated mid-cap valuations.
Indian markets ended the week largely flat as crude prices, global bond yields and geopolitical uncertainty pressured sentiment.
- Who
- Foreign portfolio investors, Indian companies and market investors; analysts Dr VK Vijayakumar of Geojit Investments Ltd and Ajit Mishra of Religare Broking Ltd also commented.
- What
- FPIs continued buying Indian equities, investing Rs 23,543 crore through August 22, while markets remained cautious.
- Where
- Indian equity markets, through stock exchanges and primary-market channels.
- When
- The investment figure covers August through August 22; the reported market performance covers the week ending Friday.
- Why
- Buying was supported by expectations of stronger GDP growth, earnings recovery, rupee stability, broader-market prospects and a shift away from the global “chip trade.”
Reasons Supporting Continued Buying
Risks Keeping Markets Cautious
Growth and earnings outlook
Reasons Supporting Continued Buying
Analysts said improving GDP prospects, first-quarter earnings recovery and stronger broader-market growth prospects could sustain FPI inflows.
Risks Keeping Markets Cautious
High US bond yields, concerns about US inflation and uncertainty over global technology spending could reduce the appeal of equities.
Investor allocation
Reasons Supporting Continued Buying
FPIs are selectively finding opportunities in mid-cap stocks and sectors such as realty, metals and banking.
Risks Keeping Markets Cautious
Foreign investors are not broadly buying attractively valued large banking and IT stocks, while mid-cap valuations remain elevated.
Near-term market direction
Reasons Supporting Continued Buying
Continued foreign buying and rupee stability are providing support to Indian equities.
Risks Keeping Markets Cautious
High crude prices, rising global bond yields, geopolitical uncertainty and possible Federal Reserve policy signals are weighing on sentiment.
Key facts
- FPI buying through August 22
- Rs 23,543 crore
- Stock-exchange investment
- Rs 14,117 crore
- Primary market and other investment
- Rs 9,426 crore
- Preferred stocks
- Selected mid-cap stocks, despite relatively high valuations
- Better-performing sectors
- Realty, metals and banking
- Stocks under pressure
- IT stocks declined around 2.6% during the week; FMCG and energy stocks were subdued
- Key risks and monitoring points
- US bond yields, crude oil prices, geopolitical uncertainty, Federal Reserve policy, rupee movements and domestic liquidity
Quotes
Dr VK Vijayakumar
Chief Investment Strategist at Geojit Investments Ltd.
“A significant trend in the market is that FPIs are not buying attractively valued leading large banking or IT stocks. Instead, they are selectively buying mid-caps despite elevated valuations”
thehansindia.com
Sources
Related news
FPIs Continue Buying Indian Equities Amid Stronger GDP, Earnings Outlook
FPIs Resume Indian Equity Buying on Earnings and Rupee Stability
Foreign Investors Extend Indian Equity Buying Streak in August
Foreign Portfolio Investors Buy ₹30,918 Crore as Markets Stay Cautious
FPIs Invest ₹16,621 Crore in Indian Equities in August
FPIs continue buying spree, invest ₹12,921 crore in Indian equities
Gold Rebounds as Dollar and Treasury Yields Retreat
U.S. Treasury Yields Ease as Jobs Data Misses Expectations
Fed Watchdog Questions Confidential Information and Director Selection
Rising US Bond Yields Prompt Indian Portfolio Rebalancing Debate
RBI Governor Meets US Fed Chief Kevin Warsh at G20
