Decoding equity flows: Retail investors offset FPI selling in April, May

Strong and sustained retail interest can counter-balance FPI selling; small and midcap may outperform

There’s been a shift in retail attitude in Q1FY22 if we look at mutual fund data. The stock market rose in April and May despite FPI selling. This was due to retail buying both directly, and via mutual funds. In June, too, the market has risen and made new highs because there’s been FPI buying as well as retail investments.

Through FY21, open-ended equity mutual funds saw net outflows of Rs 25,966 crore. Despite that, the market rose because FPIs (and other domestic institutions) were heavy net buyers in the fiscal.

Mutual funds (MFs) saw huge net inflows of Rs