Now Reading: FPIs return but stay selective in Indian stocks, August inflows top Rs 25,000 crore
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FPIs return but stay selective in Indian stocks, August inflows top Rs 25,000 crore
FPIs return but stay selective in Indian stocks, August inflows top Rs 25,000 crore
Foreign portfolio investors pumped more than Rs 25,000 crore into Indian equities between 1 and 24 August, the strongest monthly inflow since September 2024, after Rs 20,200 crore in July. If August…
Foreign portfolio investors pumped more than Rs 25,000 crore into Indian equities between 1 and 24 August, the strongest monthly inflow since September 2024, after Rs 20,200 crore in July. If August closes positive, it will mark the first two-month buying streak this year, reversing the record Rs 1.2 trillion outflow in March.
Yet the buying is narrow. Financial services, automobiles and consumer services drew the most money, while telecom, power and capital goods saw outflows. A Bank of America survey shows India has replaced Indonesia as Asia's least-preferred equity market, with 32% of respondents net underweight.
Fund managers are rotating into sectors where recent corrections have improved valuations, the Nifty Financial Services index trades at 17.3 times earnings, below its five-year average, rather than making a broad bet on India. The 10-year US Treasury yield near 4.75% and global growth uncertainty are keeping foreign investors cautious despite a strong June-quarter earnings season for Indian companies.
Indian Opinion Analysis
The data reveals a market moving in two directions. FPIs are rotating out of expensive cyclical stocks that rallied hard on capex optimism, infrastructure, power, realty, and into beaten-down consumer and financial names where earnings are more predictable. This is not a recovery of faith in India's structural story, it is a tactical repositioning driven by global cues. The 10-year US Treasury yield near 4.75% makes emerging-market risk appetites cautious, and the Bank of America survey confirms India has become Asia's least-favoured market. What matters next is whether domestic earnings momentum can sustain the selective inflows. If the Nifty 50 earnings growth decelerates from the 18% beat in Q1, or if US yields stay elevated, the August buying could reverse quickly. The next trigger is the September Federal Reserve rate decision, which will shape global fund flows into India.
Source: livemint.com
This story was synthesised by AI from the source linked above.
