FPIs pump in ₹22,453 cr in less than 2 weeks of Aug, strongest buying of the year

Foreign portfolio investors (FPIs) have made their biggest purchase of the year so far, in less than two weeks of August. In the equity market, FPIs who have been net sellers in the first six months of 2022, emerged as net buyers in July but their strongest buying is seen in the current month. From August 1-12, FPIs have pumped in a whopping 22,453 crore — making it their biggest investment this year. This also brings a remark of sustainability in FPIs’ appetite for equities as market sentiments have turned bullish. This week alone, Indian benchmarks Sensex and Nifty 50 made the highest gains in four months.

Data on NSDL showed that FPIs had invested 4,989 crore in July. While their buying habit was aggressive in August, with an inflow of 22,453 crore with far.

The half of August is still remaining and it is expected that FPIs will continue to buy more equities.

The highest selling of FPIs was seen in June to the tune of 50,203 crore. While in between April to June this year, the outflow was around a massive 1,07,340 crore.

From January to June, FPIs have sold about 2,17,358 crore in the equity market.

However, the buying in July and half of August, has helped in recovering some of these losses in the equity market. Now, as per the data, the overall foreign funds’ outflow in the equity market is around 1,89,916 crore year-to-date (January to August 12, 2022).

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “The sentiments in the market have turned bullish due to the sustained buying by FPIs. FPIs turned net buyers in July and they have turned aggressive buyers in August buying on all sessions.”

“Depreciation in the dollar (dollar index declined from above 109 during late July to around 105.26 on August 12th) is the primary driver of capital flows to emerging markets. India is a preferred destination since India has the best growth prospects among large economies of the world. FPIs have turned buyers in autos, capital goods, FMCG, and telecom. They continued to sell in IT,” Vijayakumar added.

Overall, from August 1-12, FPIs have invested 23,069 crore in the Indian market including equities, debt, debt-VRR, and hybrid instruments. The inflow was at 1,971 crore in July.

Currently, FPIs have bought more equities than any other market-related instruments. In the debt market, they invested 1,748 crore so far in August, while they pulled out 546 crore and 585 crore in debt-VRR and hybrid market respectively.

Overall, FPIs outflow in the Indian market (equities, debt, debt-VRR, and hybrid) is around 2,02,250 crore year-to-date.

Sensex closed at 59,462.78 higher by 130.18 points or 0.22%, while Nifty 50 surged by 39.15 points or 0.22% at 17,698.15 on Friday. Oil and gas along with metal stocks were major drivers of the indices, while banking stocks also made some notable contributions to the upside. IT and healthcare stocks were laggards.

This week, Sensex has risen by around 1,075 points and Nifty 50 and a little over 300 points. Overall, both the benchmarks have advanced nearly 2% each.

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