New Delhi: Foreign portfolio investors (FPIs) turned net buyers of Indian equities in April, according to data from National Securities Depository Ltd (NSDL). The FPIs purchased shares worth 116.31 billion Indian rupees ($1.42 billion) on a net basis, marking the highest level since November 2022 and the second consecutive month of net purchases. This was attributed to stronger-than-expected corporate earnings, stable macroeconomic indicators, and GST collection figures. The Nifty 50 increased by 4.06% in April, aided by the stable earnings and return of FPIs to domestic equities. The recent slide in oil prices also supported sentiment in Indian equities.
However, FPIs sold equities worth 376.32 billion rupees in fiscal year 2023, marking two straight years of net sales for the first time after record purchases of 2,740.32 billion rupees in FY2021. In the financial services sector, FPIs sold shares worth 299.93 billion rupees in FY2023, but bought 76.90 billion rupees worth of shares in the sector in April. Analysts attribute this trend to the easing of risks of a contagion in the global financial system and strong corporate earnings from the sector. FPIs also bought shares in the automobile and capital goods sectors.
In contrast, FPIs sold shares worth 49.08 billion rupees in the information technology sector in April due to a weak outlook resulting from recession fears and the banking crisis in the U.S. and a slowdown in Europe.
The rise in April has reversed losses in the benchmark Nifty in 2023, with the Nifty 50 up 0.83% in the year so far. The stable earnings and return of FPIs to Indian equities have helped boost sentiment in the market, along with the recent decline in oil prices.
