After months of hefty pullout, FPIs infuse Rs 30 bn in just five days

Foreign investors have pumped in over Rs 30 billion in the Indian capital markets in the last five trading sessions after pulling out hefty funds during April-June.

The recent infusion comes following a net outflow of more than Rs 610 billion in the last three months. Prior to that, they had poured in Rs 26.62 billion in March.

According to depositories data, foreign portfolio investors (FPIs) pumped in Rs 22.35 billion in the equity markets during July 2-6. Besides, they put in Rs 8.92 billion in the debt market, taking the total to Rs 31.27 billion.

"Equity markets are witnessing some value buying after a sharp correction in mid and small cap indices that have corrected by almost 20 per cent in 2018. The recent interest among FPIs is basically bottom fishing in beaten down stocks," said Rajeev Srivastava, head of retail broking at Reliance Securities.

Overall, it has been a bumpy ride this year as far as FPI flows are concerned and the fluctuations in net flows at times have been massive, thus making the entire proposition unpredictable.

So far this year, overseas investors have withdrawn Rs 447.37 billion from the capital markets. This includes Rs 405.41 billion from the debt and remaining Rs 41.96 billion from equities.

In January, FPIs invested Rs 222.72 billion in the capital market. However, in February they were net sellers to the tune of Rs 116.74 billion. The following month, they again turned positive and put in Rs 26.62 billion in March.

However, they took bearish stance in April and the momentum continued till June. During these three months, overseas investors withdrew over Rs 610 billion.

"Undoubtedly, this year has been extremely unfavourable from FPI flow perspective.

"This could be attributed to multiple factors. There has been significant outflow from India focussed offshore funds and exchange traded funds (ETFs) which contributes a significant portion towards FPI flow," Morningstar India Senior Analyst Manager Research Himanshu Srivastava said.

Moreover, he said India is currently fraught with higher crude prices and depreciating Indian currency.