Foreign Investors Stage a Comeback as Net Buyers in Indian Stocks for February

In a notable turnaround, foreign portfolio investors (FPIs) have once again become net buyers in the Indian equity market during the month of February. Recent data from the National Securities Depository Limited (NSDL) indicates that FPIs have purchased stocks worth Rs 2,928 crore in February, following a substantial sell-off of equities amounting to Rs 24,734 crore in January.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the market’s resilience as a key factor preventing aggressive selling by FPIs, even in the face of attractive bond yields in the US. This shift in sentiment comes after FPIs had aggressively sold Indian stocks in January, reversing their stance from the preceding months of November and December.

In December, FPIs were on a buying spree, accumulating stocks worth Rs 66,135 crore. The trend continued in November, with FPI inflows reaching Rs 9,001 crore, as per NSDL data. These strong inflows played a crucial role in supporting benchmark stock indices, propelling them to all-time highs.

The entire year of 2023 witnessed a total inflow of about Rs 171,107 crore, with over one-third of this amount pouring in during December. Before this resurgence, FPI participation in Indian stocks was lukewarm, with net selling observed in September and October, amounting to Rs 14,768 crore and Rs 24,548 crore, respectively.

Prior to the shift in sentiment witnessed in November, FPIs had displayed varying levels of interest throughout the earlier months of 2023. The data indicates that FPIs were net buyers in March, April, May, June, July, and August, with inflows ranging from Rs 7,936 crore to Rs 47,148 crore.

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