FPIs remain saddled up despite negative cues

New Delhi, March 28:

Foreign Portfolio Investors (FPIs) continued to stay put in the Indian equities space for the week ended March 27 despite the markets consolidating for the third consecutive week.

The FPIs stayed invested in the Indian markets despite the volatility that has emerged due to the geo-political tensions in the Middle East and the March F&O (future and options) expiry.

The FPIs remained net buyers in the Indian equities in the week under review despite other issues like concerns regarding the marginal increase in the retail inflation for February and its impact on the forthcoming monetary policy review of the Reserve Bank of India (RBI) slated for April 7 and the expected subdued March quarterly earning results.

“We are hearing voices that interest of FIIs (Foreign Institutional Investors) over India has reduced. On analyzing the data, we understand that FIIs have rather been net buyers to the tune of Rs.75 billion in March till date,” Vinod Nair, head, fundamental research, Geojit BNP Paribas said.

According to Nair the FIIs inflows have been healthy compared to February and January, when FIIs were net buyers by Rs. 85 billion and Rs. 124 billion (excluding primary markets).

Nair further pointed out that mutual funds have also been net buyers by Rs.19 billion in March (till March 24) and Rs.39 billion and Rs.8.8 billion in February and January.

“But DIIs (Domestic Institutional Investors) – excluding MF – continue to be net sellers by Rs.27 billon in March (till March 24). So, the current selling witnessed by the market is largely from profit booking by the domestic institutions and retails,” Nair added.

Dipen Shah, head, private client group research, Kotak Securities, told IANS that the FIIs have remained positive about the Indian markets and are expected to stay invested as the reforms movement goes on.

“FIIs are positive on the Indian markets. They are going to be invested till the time the reforms continue and progress in other key areas of the economy happens,” Shah said.

For the week ended March 27, the FPIs bought stocks worth Rs.2,301.1 crore or $369.3 million, according to the data with the National Securities Depository Limited (NSDL).

However, the foreign investors sold stocks worth Rs.419.41 crore or $66.92 million in the week under review.

For the previous week ended March 20, the FPIs bought stocks worth Rs.1,952.36 crore or $312.46 million. They, however, sold stocks worth Rs.1,159.96 crore or $184.82 million in the week ended March 20.

During the week ended March 13, the FPIs had bought stocks worth Rs.3,234.7 crore or $518.24 million. At that time they had off-loaded stocks worth Rs.957.61 crore or $152.69 million.

The Foreign Institutional Investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Securities and Exchange Board of India (SEBI) to create a new investor category called FPIs.

The triggers for the FPIs in the coming week will be the concerns regarding the marginal increase in retail inflation for February which belied expectations of a rate cut next month.

The Reserve Bank of India is scheduled to announce its first bi-monthly policy review for 2015 on April 7.

Other analysts said that major technical indicators still look weak and due to banking holiday and exchange holidays in the next week, FII participants seem reluctant to create large open positions in the April series.

Another trigger for FIIs in the coming week will be the lower expectations on Q4 earnings and negative return of -7 percent in March.

Meanwhile, the Indian equities markets consolidated for the third straight week. They fell 802.44 points or 2.83 percent during the weekly trade session ended March 27.

The BSE Sensex ended March 27 trade at 27,458.64 points. For the previous weekly trade ended March 20, it had closed at 28,261.08 points.

The 30-scrip Sensex had lost 242.22 points or 0.84 percent during the weekly trade session ended March 20.

The Sensex ended March 20 trade at 28,261.08 points from 28,503.30 points close in the weekly trade ended March 13.

The consolidation in the Indian markets continued since the weekly close of March 13, when the S&P BSE Sensex plunged 945.65 points or 3.21 percent to its worst weekly fall in 2015. IANS