FPIs invest Rs 8,400 billion in equities this month because to uncertainty globally and worries about China

Due to market volatility, economic worries in China, and local economic stability, foreign portfolio investors (FPIs) have invested close to Rs 8,400 crore in Indian shares so far this month.

Any downturn in global stocks might cause big swings in local shares and for FPIs’ flow to become choppy moving forward, according to Srikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. This is because the global economic climate is becoming problematic due to slowing Chinese demand.

Data from the depositories show that from August 1 to August 18, FPIs invested a net amount of Rs 8,394 crore in Indian shares.

FPIs, on the other hand, took a pause and withdrew more over Rs 2,000 crore from stocks in the first week of August as a result of Fitch lowering the US’s credit rating.

According to Himanshu Srivastava, Associate Director – Manager Research at Morningstar India, “the uncertainty in the global markets and economic concerns in China again played a role in FPIs shifting their focus back toward Indian markets, which have been more resilient and stable.”

Additionally, he noted, results for the June quarter that exceeded expectations provided encouraging support for the moods.

According to Abhishek Banerjee, founder and CEO of Lotusdew Wealth & Investment Advisors, the last few weeks have been unusual in the history of the Indian capital market since both domestic and FPI investors have invested in the Indian markets.

Prior to August, Indian stocks saw an unrelenting net inflow during the previous five months, from March to July, as a result of the country’s economy’s resiliency in the face of a risky global macroeconomic environment.

Moreover, in the last three months (May, June, and July), FPIs made investments totaling more than Rs 40,000 crore each.

In July, June, and May, the net inflow was each Rs 46,618 crore, Rs 47,148 crore, and Rs 43,838 crore. Prior to March, foreign investors withdrew a total of Rs 34,626 crore in January and February. FPIs made investments in the debt market worth Rs 4,646 crore during the review period in addition to equity investments.

Data from the depositories indicated that as a result, stock market inflows hit Rs. 1.31 lakh crore and debt market inflows reached Rs. 25,000 crore so far this year.

According to Lotusdew’s Banerjee, FPIs expressed interest in the financial, energy, such as oil and gas, and IT services sectors.