Jan 17, 2023
By: Rounak Jain
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Foreign portfolio investors (FPIs) have sold equities worth ₹18,808 crore and bought bonds worth ₹238 crore in 2023 so far. The benchmark Nifty50 index declined 1.1 percent during this period.
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FPI sell-off and US dollar purchases by banks have weighed on the rupee, according to a report by the Economic Times. The rupee is down 1.2 percent against the US dollar in 2023 so far.
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In December, FPIs made a net purchase of ₹9,446 crore. While they bought ₹11,119 crore worth of equities, they sold bonds worth ₹1,673 crore. Top purchases were in FMCG (₹4,019 cr) and consumer services (₹3,650 cr). Top sales were oil & gas (₹2,784 cr) and IT (₹3,579 cr).
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FPIs turned net buyers in the last six months of 2022, investing ₹95,919 crore in equity, while bonds witnessed a withdrawal of ₹1,042 crore. The net flows stood at ₹94,877 crore in this period. The Nifty50 rose 14.7 percent in the period.
Credit: Business Insider India
FPI flows witnessed a reversal in the second half of 2022 from the first half, which saw FPIs pull out ₹2.32 lakh crore from equities and bonds. The benchmark Nifty50 fell 9.2 percent during this period.
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Financial services, FMCG, consumer services, healthcare, and capital goods were the top five sectors with net flows of ₹84,124 crore, accounting for 89 percent of the total FPI investments in the second half of 2022.
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The financial services sector alone accounted for a quarter of total FPI inflows, with investors pumping in ₹24,495 crore into the sector between July-December 2022.
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Aided by strong inflows, the financial services index delivered robust returns of 22.7 percent between July-December 2022, outpacing the benchmark Nifty50’s 14.7 percent gains in the period.
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FPIs offloaded IT, and oil & gas stocks in the second half of 2022, pulling out a total of ₹22,200 crore from these two sectors.
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Apart from IT, and oil & gas, the textiles and sovereign sectors witnessed a sell-off in the second half of 2022. FPIs were net buyers in the rest of the 20 sectors in this period.
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Apart from the top five sectors, FPIs invested a cumulative ₹27,435 crore in auto, telecom, construction, services and other sectors in the second half of 2022.
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