FPI investment value rises 7% in Jun qt

The value of the foreign portfolio investors (FPI) holdings in the domestic equities reached $592 billion in three months ended June 2021, a surge of 7% from the preceding quarter, according to a Morningstar report.

This was largely on the back of robust net inflows from FPIS, coupled with the strong performance of the Indian equity markets.

“As of the quarter ended June 2021, the value of FPI investments in Indian equities stood at $592 billion, which was considerably higher than the $552 billion recorded in the previous quarter, a spike of around 7%,” the report noted.

As of June 2020, the value of FPI investments in Indian equities had been $344 billion.

However, overseas investors’ contribution to domestic equity market capitalisation dropped marginally during the quarter under review to 19.1% from 19.9% for the March quarter.

Offshore mutual funds form an important component of total foreign portfolio investment, apart from other large FPIS, such as offshore insurance companies, hedge funds, and sovereign wealth funds.

For the quarter ended June 2021, FPIS were net buyers to the tune of $0.68 billion compared with the net inflow of $7.64 billion was recorded during the quarter ended March 2021.

While the second wave of the pandemic prompted overseas investors to turn negative on Indian equities in April and May as they sold net assets worth $1.29 billion and $0.39 billion, respectively, they came back strongly in June to pump in $2.36 billion as the situation turned favorable for them.

However, FPIS turned cautious toward Indian equity kets again in July. The US F hawkish statement that it m raise interest rates much ea than assumed was the precu for the change in their stan

“They (FPIS) also starte stay on the sidelines while ing for stronger and more st signs of recovery in the econ and for corporate earnings t revealed after the second wa the pandemic,” the report m tioned.

Besides this, rising valuati the surge in oil prices, and f ness in the US dollar made t wary of the near-term risk added.