FPIs stage a comeback in December, infuse ₹24,454 crore into Indian equities; Is the sell-off over? | Stock Market News

Foreign portfolio investors (FPIs) took a sharp U-turn and turned net buyers in the first week of December, snapping their robust two-month selling streak over global cues. D-Street experts believe the trend reversal is a clear strategy for foreign investors to bank on year-end profits in the Indian stock market.

FPIs were net sellers in Indian markets last month amid the uptrend in the US market and US bond yields, which was fueled by Republican Donald Trump’s victory in the US presidential elections and the US Federal Reserve’s interest rate cut verdict. However, the US Fed has clarified there is no hurry to cut rates.

FPI sell-off hit a record high in October amid ongoing geopolitical tensions in the Middle East and cheaper valuations in the Chinese stock market. FPI outflows recorded in October were the highest ever in a single month in Indian markets. October’s FPI outflow hit a 10-month high, the highest sell-off from the Indian market year-to-date (YTD).

According to the National Securities Depository Ltd (NSDL) data, FPIs invested ₹24, 454 crore worth of Indian equities this month, and the net inflows stood at ₹34772 crore as of December 6, taking into account debt, hybrid, debt-VRR, and equities. The total debt investment was ₹355 crore so far this month.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

“FIIs turning buyers in early December, in total reversal of their sustained selling strategy during the last two months, has altered the market sentiments. In October the total FIIs selling through exchanges was ₹113858 crores. In November the amount declined to ₹39315 crores. In December, through 6th, FIIs have turned buyers having bought equity for ₹17921 crores through exchanges. Including the purchases through the primary market, the total FIIs buying through 6th December stand at ₹24453 crores (Source NSDL). This is a clear change in FII strategy in India. It can be argued that the stage of relentless FII selling is over.

The change in FII strategy is getting reflected in stock price movements, particularly in largecap banking stocks in which FIIs have been sellers. This segment has further room to go up since it is fairly valued and is growing at a reasonable pace. domestic institutional and retail money are likely to move into this segment. IT is another segment which is likely to do well and attract more FII buying.”