New Delhi, April 4:
Foreign Portfolio Investors (FPIs) continued to be glued to the Indian equities space for the truncated week ended April 1, which led the markets to soar nearly three percent.
The FPIs remained net buyers in the Indian equities despite the fact that Indian markets were in a loss-making during the last three weeks ended March 27.
For the week ended April 1, the FPIs bought stocks worth Rs.265.29 crore or $42.35 million (March 30-31), according to the data with the National Securities Depository Limited (NSDL).
However, the foreign investors sold stocks worth Rs.12.57 crore or $2.01 million in the week under review.
During the previous week ended March 27, the FPIs had bought stocks worth Rs.2,301.1 crore or $369.3 million. That time the foreign investors had sold stocks worth Rs.419.41 crore or $66.92 million.
For the week ended March 20, the FPIs had bought stocks worth Rs.1,952.36 crore or $312.46 million. They, however, sold stocks worth Rs.1,159.96 crore or $184.82 million in the week ended March 20.
The Foreign Institutional Investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Securities and Exchange Board of India (SEBI) to create a new investor category called FPIs.
Analysts said that the three weeks of consolidation made the markets even more attractive for investors as the price points became cheap. Indian equities had turned over invested due to exponential rise in stock prices.
“The three consecutive weekly falls also made the markets more attractive for the long term investors. The correction has led to attractive pricing during the week gone by,” Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.
Gaurang Shah, vice president, Geojit BNP Paribas cautioned that the FII’s would like to see the earnings growth before committing any fresh allocation in the Indian markets.
For 2014-15, the foreign players increased their investments in the Indian equities markets by 39.67 percent by pumping Rs.111,333 crore during 2014-15.
The NSDL data showed that the FPIs had infused Rs.79,709 crore into the equities market in 2013-14.
“The rise can be attributed to the fact that we were at a low base during 2013-14 and that the Indian markets were cheap and the currency even made it more cheaper to invest here,” Anindya Banerjee, senior manager, currency derivatives, Kotak Securities told IANS.
“There was also this huge shift in the Indian political landscape with a majority government coming into power and the euphoria surrounding the new government’s economic reforms agenda and the pace at which measures were announced and passed in parliament,” Banerjee added.
For the January-March, 2015 quarter, investments by FPIs in the equities markets soared by 64.32 percent at Rs.36,473 crore from Rs.22,195 crore infused in the corresponding quarter of 2014.
However, for the month of March, the FPIs’ investments in the equities markets plunged by 39.84 percent at Rs.12,078 crore from Rs.20,077 crore infused in the corresponding month of 2014.
The triggers for the FPIs in the coming week will be the concerns regarding the marginal increase in retail inflation for February which belied expectations of a rate cut next month.
The Reserve Bank of India is scheduled to announce its first bi-monthly policy review for 2015 on April 7.
Another trigger for FIIs in the coming week will be the lower expectations on Q4 earnings and negative return of -7 percent in March.
Meanwhile, the benchmark 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) gained 801.55 points or 2.91 percent during the weekly trade session ended April 1.
The Sensex had ended the truncated weekly (April 1) trade session at 28,260.14 points. For the previous weekly trade ended March 27, the BSE Sensex had closed at 27,458.64 points.
The Indian markets were closed on April 2-3 on account of Mahavir Jayanti and Good Friday. IANS