FPIs turn cautious, inflows thin this month

Foreign portfolio investments in equities have seen a major drop in September so far, with net buying of just Rs 1,766 crore compared with the previous month in which FPIs had invested over Rs 47,000 crore.

August had seen record FPI investments at Rs 47,080 crore, but in September FPI inflows have been subdued and consistency is missing, with large amounts of net selling observed on some days, shows NSDL monthly data.

The sharp fall in India’s first quarter GDP by - 23.9 per cent, announced on August 31, did trigger selling by foreign portfolio investors by Rs 2,356 crore in a day.

“Sharper than expected fall in growth calls for supportive measures from both the RBI and the Ministry of Finance,” said Aastha Gudwani and Indranil Sen Gupta, analyst, Bank of America Global Research.

Last week, major FPI participation was witnessed in the weekend anchor investors allotment of shares in Computer Age Management Services ( Cams) IPO, worth Rs 666.56 crore, proving FPIs appetite for Indian equities to be alive.

Whether the remaining days in September will make up for the subdued flows is anybody's guess. The caution in the market ahead of another earnings season and the big US event, of presdiential election on November 3, seems in line with the global market trends.

The change in trend particularly pronounced in the US market. Alltimehigh US stock market indices are turning volatile of late and market experts are predicting a reversal in trend either near to or post the US elections.

Last week, the Dow Jones Industrial Average and technology stock index Nasdaq registered third straight weekly losses for the first time this year.