Team Blitz India
NEW DELHI: Foreign portfolio investors (FPIs) re-entered the Indian equity markets with a notable net investment of Rs 2,743 crore, signaling a positive turn. However, despite this recent inflow, overall FPI investments remain in the negative territory.
According to the latest data from the National Securities Depository Limited (NSDL), net investments for June are still in the red, standing at Rs 3,064 crore. This negative trend follows a period of significant sell-off by foreign investors, which occurred in the wake of the announcement of election results. However, confidence seems to be returning to the Indian market with the Modi 3.0 government now in charge.
The first week of June was marked by extreme volatility in FPI flows, largely influenced by the exit polls and the actual election results. On June 3rd, buoyed by the optimistic exit poll results, FPIs made substantial equity purchases of Rs 6,521 crore.
However, the actual election results did not meet the expectations set by the exit polls, leading to a sharp market downturn on June 4th. In response, FPIs reacted by offloading stocks worth Rs 12,259 crore.
“After the roller coaster ride in the market in the first week of June, stability has returned to the market as indicated by the sharp fall in India VIX from 27 on June 4th to 12.82 on 14th June. This fall in India VIX indicates the return of stability and a likely consolidation phase in the market” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
