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Foreign portfolio investors (FPIs) were net buyers of Indian equities in April, the first month of the new financial year, National Securities Depository Ltd (NSDL) data showed on Friday. FPIs purchased shares worth ₹11,631 crore ($1.42 billion) on a net basis in April, the highest since November 2022.
They had been net purchasers in the previous month too, though largely due to US investment firm GQG Partners' $1.87 billion investment in four Adani Group companies in early March.
"Stronger-than-expected corporate earnings, stable macroeconomic indicators like Purchasing Managers' Index and GST collection figures have led to return of FPIs into Indian equities," said Anita Gandhi, director at Arihant Capital Markets.
The benchmark Nifty 50 jumped 4.06 per cent in April, its best month since November, aided by the stable earnings as well the return of the FPIs into domestic equities.
The recent slide in oil prices also supported sentiment in Indian equities, two analysts added.
FPIs sold equities worth ₹37,632 crore in FY23, marking two straight years of net sales for the first time, after record purchases of ₹2,74,032 crore in FY21.
PURCHASES AND SALES
After selling financial services shares worth ₹29,993 crore in FY23, FPIs bought ₹7,690 crore in the sector in April.
Analysts said that easing risks of a contagion in the global financial system and strong corporate earnings from the sector boosted investors' sentiment. Automobile and capital goods sectors also witnessed FPI buying.
On the flip side, information technology saw selling pressure with foreign investors offloading ₹4,908 crore worth of shares in April.
"The selling in IT stocks comes after weak outlook due to recession fears and banking crisis in the US and slowdown in Europe," added Gandhi.
The rise in April has reversed losses in the benchmark Nifty in 2023. The Nifty 50 is up 0.83 per cent in the year so far.
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