FPIs turn net buyers in April so far; invest `7,707 crore in equities

New Delhi: After a six-month selling spree, foreign investors have turned net buyers in April so far by infusing Rs 7,707 crore in Indian equities as a correction in markets provided them a good buying opportunity.

Himanshu Srivastava, Associate Director - Manager Research, Morningstar India, said it would still be slightly premature to call it a change in trend with respect to FPI flows, and hence it will be prudent to watch how the scenario unfolds over the next few weeks or months to get more clarity.

According to latest data with the depositories, foreign portfolio investors (FPIs) have made a net investment of Rs 7,707 crore in Indian equities during April 1-8.

Srivastava said the inflow indicates that maybe foreign investors are almost done with the recalibration exercise of their portfolios owing to the current scenario. Also, the recent correction in the equity markets have opened investment opportunities, which FPIs would have sought as a good entry point, he added.

However, they were net sellers during the last two trading sessions, suggesting that there is still lack of certainty on the direction of FPI flows.

The latest inflow comes following massive net outflows to the tune of Rs 1.48 lakh crore from equities in the last six months from October 2021 to March 2022. These were largely on the back of anticipation of rate hike by the US Federal Reserve, and later, due to the deteriorating geopolitical environment following Russia's invasion of Ukraine.

Apart from equities, FPIs put in Rs 1,403 crore in the debt markets during the period under review, after pulling out a net Rs 8,705 crore in the last two months (February and March).

The fund infusion could be a result of foreign investors parking their investments from a short-term perspective or a tactical investment.