FPIs pump in over ₹45,000 crore so far in August

Foreign portfolio investors (FPIs) made a strong comeback in the stock markets in August. After selling more than $33 billion in the nine months between October 2021 and June 2022, FPIs have net purchases in stocks and bonds worth about $5.5 billion over the past three to four weeks, with most of the money coming in during August. ,

While this buying prompted the Nifty and Sensex to recover nearly 18 per cent from their 2022 lows and even helped the rupee recover from its lifetime lows, experts are now cautious in investing and trading. Caution is advised as there may be slight upward trend from the current. Level.

In August alone, FPI purchases in Indian markets stood at Rs 44,500 crore, including primary market purchases. Data from National Securities Depository Limited (NSDL) shows that they bought equity worth Rs 44,481 crore between August 1 and 19. This is the highest purchase so far this year. In July, the figure stood at ₹4,989 crore, of which only ₹1,674 crore was invested in the debt market.

Will the rally continue?

Equity markets got support on the back of fall in global crude oil and other commodity prices. But, experts believe that the rally has lasted too long amid tight monetary slowdown in the US and Europe. According to Rishi Kohli, Managing Partner and CIO Hedge Fund Strategies at Incred Alternatives, there are a lot of local and global factors leading to potential market downside and volatility in the next few weeks.

“Derivative data shows that in the last two trading sessions, FPIs have once again started selling in cash and single stock futures. Several other technical data points indicate that the market may reverse. On Friday, a Bearish Engulfing candle formed on the technical charts of Nifty and Bank Nifty. Similar formations have mostly corrected 10-15% in the past and this time it has happened at important trendline resistance, so it is time to be cautious in the near future. Also, India’s market cap as a percentage of world market cap is close to its peak which was last seen in 2010 – so this is another kind of resistance,” Kohli said.

what to see

In the coming days, markets will focus on the Jackson Hole Economic Symposium where Federal Reserve Chairman Jerome Powell will speak on Aug. 25.

Published on

21 August 2022

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https://www.thehindubusinessline.com/markets/fpis-pump-in-over-5-billion-so-far-in-august/article65794493.ece

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