In the first week of January, major Foreign Portfolio Investors (FPIs) continued to inject substantial funds into Indian equity markets, contradicting historical trends. NSDL data indicates FPIs poured in Rs 4,773 crore into Indian equities, continuing the trend from December. The preceding month witnessed an extraordinary influx, with FPIs injecting a staggering Rs 66,134 crore, propelling the Nifty to a nearly 8 per cent surge.
December's market boom coincided with robust FPI liquidity, amounting to Rs 58,372 crore. The last two months of 2023 saw significant FPI investments, attributed to a decline in US bond yields and a weakening dollar. After a few months of negative trends, December marked a sharp turn as FPI inflows shifted positively.
The total FPI inflow for 2023 reached Rs 171,106 crore, reflecting the increasing investor confidence. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted FPIs' interests in financial services, IT, autos, capital goods, oil & gas, and telecom sectors during December.
The Geojit analyst attributed this investment surge to the decline in US bond yields and the weakened dollar, expecting FPIs to continue increased purchases in 2024, particularly leading up to the general elections.
Notably, FPIs made record net purchases of Indian equities totaling Rs 1.77 lakh crore in 2023, marking the highest-ever inflow in Indian rupees. The year 2024 anticipates further FPI inflows into debt instruments, contributing to the uptrend in benchmark indices, mainly in large-cap stocks.
The previous month alone witnessed nearly a third of the total inflows for the year, setting a high bar for monthly influxes in 2023. The outlook for 2024 foresees a surge in FPI inflows into debt instruments, setting the stage for continued market momentum.
(With Agency Inputs)
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