October 10, 2021 11:48 AM
Foreign portfolio investors (FPIs) remained net buyers to the tune of Rs 1,997 crore so far in October as India continues to be a competitive investment destination from a long-term perspective.
As per depositories data, Rs 1,530 crore was invested by FPIs in equities andRs 467 crore into the debt segment between October 1-8. The total net investment stood at Rs 1,997 crore.
FPIs have been net buyers for two consecutive months and have invested Rs 26,517 crore in September and Rs 16,459 crore in August.
“A stand out feature of FPI flows in recent weeks is the outflows from banking and inflows into IT,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Even though IT is highly valued, this segment is attracting increasing flows since earnings visibility is high in the segment while banking is struggling with poor credit growth and rising asset quality concerns, he added.
“From the long-term perspective, India continues to be an important and competitive investment destination, and that is where Indian equities keep on attracting FPI flows at regular intervals, as is evident this week,” said Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.
He further said that volatility in flows may continue. With markets trading near all-time high levels, profit-booking by FPIs from time to time cannot be ruled out.
India, Philippines and Thailand reported FPI inflows of USD 624 million, USD 29 million and USD 121 million, respectively, said Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities.
On the other hand, Taiwan, South Korea and Indonesia reported FPI outflows of USD 2,211 million, USD 841 million and USD 37 million, respectively, Chouhan added.
Going forward, volatility in the global markets as well as global slowdown may impact foreign flows moving into Indian shores.
Also, any direction by US Fed towards tapering of the stimulus measures would make FPI flows into emerging markets volatile and at the same time it would be crucial in dictating the direction of foreign flows into Indian equities, Srivastava said.