Foreign portfolio investors (FPIs) remain net buyers overall month-to-date, albeit with money withdrawn from equities in recent days. Market sentiment has recently become volatile on fears of a global economic slowdown. Both the Sensex and Nifty 50 fell more than 2% in the trading week of September 12-16. This month, September 16, FPI’s investment in the stock market is over €12,000 crores. Foreign investors are expected to wait and watch ahead of the Federal Reserve Board meeting scheduled for later this week.
Data from NSDL showed that FPIs are net buyers in September (ending September 16), with an inflow of €12,084 crore in the Indian stock market. They are also net buyers in bond and hybrid markets with an inflow of €1,777 crores and €However, 268 crore or FPIs are net sellers of debt VRR instruments with an outflow of €1,225 crores.
As a result, FPIs have appeared across the Indian market (including equities, debt VRR, hybrid and debt). €12,904 crore so far in the current month.
dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said: “A key factor supporting the recent rally in the Indian market has been the ongoing FII buying that started in July and picked up momentum in August. FII buying to continue in September Per NSDL data, FPI buying across September exchanges is due through 16th September €12084 cr.”
However, Vijayakumar also added, “FPIs have turned into sellers in the spot market over the past few days. You sold stocks €3260 cr on Friday 16th (tentative). This sudden big sell must have contributed to the sharp drop from 1093 points in Sensex on the 16th. The global market situation has become volatile amid fears of a global economic slowdown.”
According to NSE data, foreign investors (FIIs) withdrew on September 16th €3,260.05 crore from the stock market — higher than the outflow of €1,270.68 crore on September 15 and €1,397.51 million on September 14th.
In August, FPIs made their biggest investment of the year. Inflow pending €51,204 crore in the stock market.
In particular, in the first six months of 2022, FPIs were net sellers and the outflow trend ended in July. From January to June, FPIs set a record €2.17.358 crore from the stock market. With an outflow of 2016, June was the strongest in terms of sales of the year €50,203 crores.
Shares have recouped some outflows due to buying in the second quarter of FY23 (July to September 16).
Year-to-date (to September 16) the FPI outflow is now enclosed €1.49.081 crore in the stock market. Throughout the Indian market, the outflow is round €1.55,894 million.
Looking ahead, Vijaykumar said, “FPIs will likely wait and watch before resuming their purchases in India.”
According to Apurva Sheth, Head of Market Perspectives, Samco Securities, next week’s FOMC meeting and press conference will be the focus of attention. The interest rate decision by the Fed can trigger nervousness on the markets worldwide. Given the Fed’s dovish stance, some people are even expecting a 100 basis point rate hike. US markets already faced deep cuts as they reacted to the August 22 CPI and core inflation reads. Although India has significantly outperformed all other major markets, it is expected to remain volatile.
The FOMC is expected to meet on September 20-21. The majority expect a third aggressive rate hike of 75 basis points from the Fed to tame inflation that has been high for several decades.
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