FPIs Remain Net Buyers So Far In October Amid Better-Than-Expected Financial Results

Foreign portfolio investors remained net buyers in Indian markets in October so far, pumping in a net Rs 17,749 crore in the month as better-than-expected quarterly results, opening of the economy, and resumption of business activities kept investors' interest intact.

In equities, FPIs invested a net sum of Rs 15,642 crore and the debt segment saw an inflow of Rs 2,107 crore during Oct. 1-23, the depositories data showed. The total net investment during the period under review stood at Rs 17,749 crore.

In September, FPIs were net sellers at Rs 3,419 crore. The investment in Indian markets has come at a time most of emerging markets like Brazil, South Africa, Taiwan, and Thailand have seen net outflows in 2020, said Co-Founder and Chief Operating Officer at Groww Harsh Jain.

This shows that foreign investors perceive India to be performing well in the immediate as well as long horizon, he said.

FPIs, according to Jain, have also continued to increase stake in Reliance and have reduced shareholding in other energy sector companies.

Himanshu Srivastava, associate director – manager research, Morningstar India, said, "While the availability of surplus liquidity in the global markets has been ensuring the flow of foreign money in Indian equities despite concerns; opening of the economy, resumption of business activities and better than expected quarterly results kept investors' interest intact."

For the future of FPI investment, Srivastava said one can expect bouts of net inflows and outflows by FPIs in the Indian financial markets, depending on their changing opinion and global trends.

On the global front, the U.S. Presidential election, uncertainty over a U.S. stimulus deal and worries about rising Covid-19 infection in several parts of Europe and the U.S. could turn investors risk-averse if the scenario demands, he said.

Besides, the continuation of accommodative stance by global central banks may ensure the flow of foreign investments into emerging markets, including India, Srivastava added.