Despite some late selling, foreign portfolio investors (FPIs) have emerged as net buyers in March, demonstrating confidence in the Indian equities market. The month witnessed robust equity purchases amounting to Rs 35,098 crore, marking a significant uptick compared to the preceding months. This surge in investment was driven by strong buying trends observed across various sectors including capital goods, automobiles, financials, telecom, and real estate.
March FPI Performance
March showcased a notable turnaround in FPI sentiment, with substantial net inflows into Indian equities. The positive momentum witnessed in March contrasts with the lackluster performance observed over the previous two months. Despite some late selling activities, FPIs have displayed a renewed interest in Indian stocks, contributing to the month’s impressive performance.
FPI Activity in 2024
In the year 2024 thus far, FPIs have exhibited a mixed trend in their investment activities. While January saw FPIs being net sellers, offloading equities worth Rs 25,744 crore, February witnessed a reversal with FPIs turning net buyers, albeit with purchases amounting to Rs 1,539 crore. March, however, has marked a significant resurgence in FPI investment, underscoring growing confidence in the Indian market.
Expert Insights
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attributes the recent trends in FPI flows to their erratic nature. Despite this volatility, Dr. Vijayakumar highlights the resilience exhibited by the domestic stock markets and the improving macros of the Indian economy as key factors driving FPI investments. Notably, FPIs have been particularly bullish on sectors such as capital goods, automobiles, financials, telecom, and real estate.
Role of Domestic Investors
Alok Agarwal, Head Quant & Portfolio Manager at Alchemy Capital Management, emphasizes the robustness of FPI inflows in FY24, indicating sustained foreign investor confidence in the Indian market. Agarwal underscores the growing influence of retail investors in bolstering market strength, particularly in offsetting the impact of FPI outflows. Domestic mutual funds and retail investors have significantly increased their free float ownership in NSE-listed companies, further contributing to market stability.
Market Performance
In the March series, the Nifty Index witnessed a gain of 1.6%, closing at 22,327, while the Nifty Bank surged by 2.2%, settling at 47,125. However, amidst this upward trajectory, the midcap index and small-cap index experienced marginal losses of 0.5% and 4.4%, respectively. Despite fluctuations in specific segments, the overall market sentiment remains positive, buoyed by sustained FPI investments and growing participation from domestic investors.
Disclaimer
It’s important to note that recommendations, suggestions, views, and opinions provided by experts represent their own perspectives and do not necessarily reflect the views of Atom News. Investors are advised to conduct thorough research and seek professional guidance before making investment decisions.
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