FPIs Kick Off August as Net Sellers, Offload Rs 1,027 Crore in Indian Stocks – What Does It Mean for the Market?

Foreign portfolio investors (FPIs) sold Indian stocks worth Rs 1,027 crore during the first two days of August. This brings their total investments in 2024 to Rs 34,539 crore.

In July, FPIs purchased domestic shares worth Rs 32,365 crore, and in June, they were net buyers with Rs 26,565 crore. However, in April and May, they were net sellers, offloading shares worth Rs 8,671 crore and Rs 25,586 crore, respectively.

Earlier in the year, FPIs showed mixed activity. They were net buyers in February and March, purchasing stocks worth Rs 1,539 crore and Rs 35,098 crore, respectively. But in January, they started the year on a negative note by selling shares worth Rs 25,744 crore.

On Friday, foreign institutional investors (FIIs) sold shares worth Rs 3,310 crore, while domestic institutional investors (DIIs) bought shares worth Rs 2,965.94 crore.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that FPIs have been inconsistent, frequently switching between buying and selling. In contrast, DIIs have been consistently buying. He mentioned that some upcoming events could affect FPI activity.

A sharp drop in job creation and rising unemployment in the US might suggest a possible recession, which has not been fully considered by the market yet. He added that there is a high chance of the US Federal Reserve cutting interest rates in September, leading to a drop in the US 10-year bond yield to 3.79%. While this could attract FPI inflows into emerging markets like India, FPIs might pull out more funds because India is currently the most expensive emerging market. Vijayakumar concluded that the trends in the US economy and markets in the coming days will influence FPI activity in August.