FPIs invest Rs 7,962 crore in equity market during first week of July

Foreign Portfolio Investors (FPI) have infused Rs 7,962 crore in the Indian equity market in the first week of July, according to the data from the National Securities Depository Limited (NSDL). The data highlights that the total investment by FPIs in the Indian markets also crossed Rs 1 lakh crore this year and according to NSDL stands at Rs 103,934 crore.

The other emerging markets also received substantial FPI inflows this month. Indonesia received an FPI investment of USD 127 million, Malaysia received USD 81 million, the Philippines received only USD 5 million inflow and South Korea received a record investment of USD 927 million in the first week of July.

However, the equity markets of Thailand and Vietnam witnessed outflows of USD 69 mn and USD 68 mn, respectively.

"Markets remained optimistic about strong government support for the economy, especially for the manufacturing sector, in the upcoming Union Budget. Market optimism continued to extend, with IT services finding favor ahead of the upcoming Q1FY25 earnings season. FPI flows are expected to remain volatile," said Shrikant Chauhan, Head of Equity Research, Kotak Securities.

Earlier in June, the FPIs turned net buyers in Indian markets after two months of selling. In June, FPIs injected a net investment of Rs 26,565 crore into Indian equities, following initial selling earlier in the month after the announcement of election results.

Before that in May, the FPIs withdrew Rs 25,586 crore from the equity market, while in April, they were net sellers with a withdrawal of Rs 8,671 crore. This trend of outflows created selling pressure in the Indian equity market.

But now, the surge in FPI investments points to the renewed confidence by investors in India's market potential and economic outlook. Now the investors will monitor the upcoming budget by the central government and the markets will react accordingly.