By Bharath Rajeswaran
BENGALURU (Reuters) – Foreign portfolio investors (FPIs) snapped their two-month-long selling streak to turn buyers of Indian equities in March, despite offloading shares in the second half of the month, according to National Securities Depository Ltd (NSDL) data.
FPIs offloaded shares worth 46.4 billion rupees on a net basis between March 15-31, but were buyers worth 79.35 billion rupees for the month, largely due to U.S. boutique investment firm GQG Partners’ $1.87 billion investment in four Adani Group companies in early March.
FPIs snap selling streak in March, https://www.reuters.com/graphics/FPI-MARCHS/MARCHS-FPI/gkplwjxqnvb/chart.png
For the financial year ended March, FPIs sold equities worth 376.32 billion rupees, marking two straight years of net sales for the first time ever. The sales come after record purchases of 2740.32 billion rupees in FY2021.
FPI flows in Indian equities , https://www.reuters.com/graphics/FPI-FISCAL/FISCAL-FPI/klvygmzllvg/chart.png
The benchmark Nifty 50 index rose 0.32% in March, but recorded a dip of 0.6% from April 2022 to March 2023.
PURCHASES AND SALES
FPIs offloaded nearly 70 billion rupees each in information technology (IT) and oil and gas stocks, and bought services stocks worth over 70 billion rupees in March.
Sectoral FPI flows in March, https://www.reuters.com/graphics/SECT-MARCHF/MARCHF-SECT/gkvlwjxknpb/chart.png
For FY 2023, the most FPI selling was recorded in IT stocks — like Tata Consultancy Services Ltd, Infosys Ltd and Wipro Ltd – amid concerns in the U.S. banking system.
Sectoral FPI flows in financial year 2022-23, https://www.reuters.com/graphics/SEC-FY2023/FY2023-SEC/gdpzqnwaqvw/chart.png
Indian IT firms earn more than 25% of their revenue, per exchange filings, from the U.S. and European banking, financial, services and insurance (BFSI) sector. Analysts have warned that the current turmoil in the global banking system will weigh on the IT stocks.
The Nifty 50 is down nearly 2.5% in 2023 so far that has made domestic valuations attractive, according to brokerages such as Jefferies and Morgan Stanley.
G Chokkalingam, founder and head of research at Equinomics, said it was unlikely the full-year selling streak would extend to this year.
“Rarely have foreign investors been aggressive sellers of Indian equities for three years in a row.”
($1 = 82.6700 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sohini Goswami)
