Foreign portfolio investors net bought Indian equities worth Rs 4,398 crore last week, according to NSDL data. This is against them selling shares worth over 2,500 crore in the preceding week.
The Sensex net gained around 1% last week and closed at 73142.80 points on Friday.
The inflows have come despite the rise in US bond yields. Usually, when the US 10-year yield rises above 4.15%, FPIs sell heavily.
“The resilience of the market is preventing the FPIs from selling aggressively despite attractive bond yields in the US. In debt, FPIs continue to be buyers having bought debt worth Rs 18589 crores in February so far,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services.
However, FPIs have overall been net sellers in February, and sectors such as financial services, fast moving consumer goods, metals and mining, construction, power, and telecom saw maximum outflows. These six sectors saw outflows of over Rs 22,500 crore ($2.71 billion) in the first fortnight of February. In financial services alone, they sold shares worth Rs 7,536 crore. Selling in the fast moving consumer goods sector intensified as quarterly earnings of major companies suggested weak rural consumption and as cost pressures increased. FIIs net sold shares worth Rs 3,011 crore in the first fortnight of February, compared to the selling of over Rs 2,000 crore in the previous fortnight.
The power sector, which has seen significant inflows in the recent months, succumbed to profit booking, as FIIs sold stocks worth Rs 2,895 crore in the first fortnight of February.
“Investors are cautious in the banking sector due to credit demand moderating and struggling to raise deposits,” said Arvinder Singh Nanda, senior vice president, Master Capital Services.
However, global developments, movement in bond yields and the dollar index will continue to determine flows in the near to medium term.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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