Foreign portfolio investors (FPIs) made a sharp turnaround to become net buyers in the first week of December, breaking their robust two-month selling streak on global cues. D-Street experts believe that the trend reversal is a clear strategy for foreign investors to bank on the year-end gains in the Indian stock market.
According to the National Securities Depository Ltd (NSDL) data, FPIs have invested ₹This month, Indian equities valued at Rs 22,766 crore and saw net inflows ₹34,318 crore as on December 13, taking into account debt, hybrid, debt-VRR and equity. The total debt investment is ₹666 crore so far this month.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services
“FIIs who turned buyers in December, after brutal selling in October and November, have helped the market recover from the November lows. FIIs have been buying shares for ₹14435 crores through exchanges till December 13.
The total purchase figure including stock exchange purchases and purchases via the ‘primary market and other category’ was ₹22765 crores on December 13. FII buying has led to a rally in largecaps, especially in banking and IT sectors.
While FIIs have turned buyers in December, they have also been big sellers on certain days. This indicates that they may become sellers again at higher levels as Indian valuations remain relatively high compared to other markets. The rising dollar is another concern that could push FIIs to sell at higher levels.”
FII sales in November were lower than those in October, which can be partly attributed to lower valuations due to the market correction. However, market analysts noted that despite the sell-off in stocks, the trend of FII buying through the primary market continued in November.
In November, FIIs pre-purchased shares ₹17,704 crore through the primary market. “If we take the period up to November 29, 2024, the total FII sales for the year are ₹1,18,620 crore. During this period, FIIs pre-purchased shares ₹1,03,601 crore through the primary market. The reason for this dichotomy is the high valuations in the secondary market and the reasonable valuations in the primary market,” said analysts at Geojit Financial Services.
Disclaimer: The views and recommendations expressed in this analysis are those of individual analysts or brokerage firms, not Mint. We strongly advise investors to consult certified experts before making any investment decisions as market conditions can change rapidly and individual circumstances may vary.
