Foreign portfolio investors turn net buyers in January, again: Data

After being net sellers for the past three months, foreign portfolio investors (FPIs) have turned net buyers in January.

According to the National Securities Depository data, FPIs have bought equities worth Rs 2,568 crore so far in January. In the past three months, FPIs were net sellers worth Rs 35,984 crore.

The selling began in October 2021 after the indices hit record highs. Discomfort with valuations, concerns about the monetary policy support and the Omicron variant led to aggressive selling.

However, FPIs turned net buyers in the beginning of January. Analysts said the net buying at the beginning of the year was a relative play, given India was seen managing the Omicron variant rather well.

Moreover, the purchasing managers' index and the goods and services tax numbers were an indication that the Indian economy was still in recovery mode, despite the onslaught of the new variant.

However, the rising number of Covid cases has brought back concerns. India reported over 141,986 daily Covid cases in the last 24 hours ending 8 am on Saturday. Analysts said the FPI flows in the first quarter of 2022 will depend upon whether the new variant necessitates stringent lockdowns.

Experts said India might be a relative outperformer than other emerging markets, or there could be marginal outflows. The flows could come back once the anxieties over rising interest rates stabilise since FPIs will be looking for growth.

The Union Budget and the corporate commentary during the results season are the other events FPIs will keenly track.