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FIIs are expected to concentrate primarily on sectors with strong growth potential. | Representational
Foreign Institutional Investors (FIIs) purchased Indian equities worth over $1.6 billion between August 16 and 27, according to National Securities Depository Limited (NSDL) data. During this period, both benchmark indices – Sensex and Nifty – appreciated by more than 1.4 per cent, while the BSE MidCap and SmallCap indices gained 1.8 per cent and 2.4 per cent, respectively.
This surge in FII buying was largely driven by bulk deals involving companies such as Ambuja Cement, Tata Tech, GMR Airports, Zomato, PNB Housing, and Nykaa. Collectively, these transactions were valued at approximately Rs 22,000 crore, as reported by NSDL data cited in a Moneycontrol report.
Additional factors contributing to the FII buying spree include speculation surrounding a potential interest rate cut by the US Federal Reserve, stabilisation of the Indian rupee, and positive sentiment regarding India’s growth prospects. Analysts predict this trend is likely to persist in light of India’s robust economic performance and stable macroeconomic indicators.
August first-half saw highest FII outflow
In contrast to the latter half of the month, the first half of August (between August 1 and 14) experienced the highest outflow from India among emerging markets. FIIs sold equities worth about $2.12 billion during this period, resulting in declines of over 1 per cent in both the Sensex and Nifty indices, and decreases of 1 per cent and 1.3 per cent in the BSE MidCap and SmallCap indices, respectively.
During August, FIIs also withdrew $1.14 billion from Japan, $1.6 billion from South Korea, $1.17 billion from Taiwan, and smaller amounts from Thailand and Vietnam. However, they invested $1.35 billion in Brazil, $899 million in Indonesia, $278 million in Malaysia, and $121 million in the Philippines.
High volatility in global markets
Market observers note that global markets are experiencing significant volatility due to weak economic data from the United States, fears of a recession there, and uncertainty surrounding potential interest rate cuts by the Federal Reserve. As a result, FIIs are expected to concentrate primarily on sectors with strong growth potential and companies boasting solid fundamentals.
First Published: Aug 29 2024 | 10:50 AM IST
