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Weekly Musings – FPI flows for week ended April 19, 2024

22 Apr 2024 , 09:40 AM


For the week to April 19, 2024, there were a number of data points, both domestic and global. However, the one thing that FPIs looked at closely is the geopolitical situation. In the week, there were reports that Israel had retaliated by attacking some of the key nuclear installations in Iran. However, while Iran report there was no damage to its facilities, Israel did not either conform or deny the allegations. Over the last couple of week, the situation in West Asia has been tense with Iran and Israel at the brink of all-out war. Apparently, neither country wants a full-fledged war, but they seem to have gone too far to back out.

The geopolitical situation in the Middle East impacted the FPI flows through a number of variables. Firstly, the typical safe-haven flows again gravitated out of the emerging markets like India and into safer avenues like Western markets or even into gold. In fact, the rally in gold continued as the price of spot gold crossed $2,400/oz during the week. To add to the woes of these FPIs, the US bond yields and the US dollar index also hardened during the week. Nevertheless, it was a classic recipe for the FPIs to take money out of India. Not surprisingly, FPIs were decisive net sellers in the week.


During the week, the RBI published the minutes of the April Monetary Policy Committee (MPC) meeting. While inflation was always the main issue, the markets were expecting that the RBI to give some guidance on the trajectory of rate cuts. It is well known that the RBI would not move on rates till the elections were completed, new government installed and full budget was presented. Nevertheless, the markets did expect the RBI to be forthright about when it would seriously look at rate cuts. Instead, the MPC members gave a fairly grim picture of inflation and warned that they needed more confirmation from data before starting to cut rates. With the exception of Jayanth Varma, the other 5 members felt it was too early to talk about rate cuts and also too early to change the monetary stance to neutral. FPIs ended net sellers of $2.23 Billion in the week. FPIs were net sellers on all the 4 trading days during the truncated trading week.


The table captures monthly FPI flows into equity and debt for 2022, 2023, and 2024.



FPI Flows Secondary FPI Flows Primary FPI Flows Equity FPI Flows Debt/Hybrid Overall FPI Flows
Calendar 2022 (₹ Crore) (146,048.38) 24,608.94 (121,439.44) (11,375.78) (132,815.22)
Calendar 2023 (₹ Crore) 1,27,759.75 43,347.14 1,71,106.89 65,954.38 2,37,061.27
Jan-2024 (₹ Crore) (28,863.89) 3,120.34 (25,743.55) 19,150.21 (6,593.34)
Feb-2024 (₹ Crore) (3,194.72) 4,733.60 1,538.88 30,277.95 31,816.83
Mar-2024 (₹ Crore) 29,152.54 5,945.78 35,098.32 16,987.88 51,996.20
Apr-2024 (₹ Crore) # (13,546.23) 8,292.49 (5,253.74) (3,728.37) (8,982.11)
Total for 2024 (₹ Crore) (16,452.30) 22,092.21 5,639.91 62,597.67 68,237.58
For 2024 ($ Million) (1,956.25) 2,658.98 702.73 7,544.57 8,247.30
# - Recent Data is up to April 19, 2024 

Data Source: NSDL (Negative figures in brackets)

In the previous week to April 12, 2024, the FPIs had surprised the street by infusing $1.64 Billion into Indian equities. That was rather surprising at a time when the geopolitical situation was so fluid. However, there was no such ambiguity in the latest week to April 19, 2024, as FPIs turned net sellers to the tune of $2.23 Billion. This is despite the smart flows from anchor investors into the Vodafone Idea FPO, which saw substantial buying interest from the qualified institutional buyers (QIBs) absorbing 30% of the FPO size of ₹18,000 Crore. FPIs ended up being net sellers in debt also this week.

The week to April 19, 2024 saw FPIs turning net sellers the equity secondary markets and in debt markets, although the infusion into primary markets helped to an extent. For calendar 2024 overall, FPIs were net buyers to the tune of $8,247.30 Million. However, it is the outflows from debt that is more of a sentiment dampener, despite the index inclusion tailwind for bond markets. For 2024 till date, FPIs net bought equities worth $702.73 Million and were net buyers in debt to the tune of $7,544.57 Million. As of the close of April 19, 2024, the FPIs were still net sellers in secondary market equities worth $(1,956.25) Million, while the buying in IPOs compensated for that at $2,658.98 Million. Needless to say, the debt flows were robust overall, despite the sell-off in the latest week.

There are 2 things we can infer from the above data. Firstly, FPI flows came under pressure this week after managing to hold up in the previous week. Secondly, these FPI outflows were a reaction to concerns over emerging market equities amidst the rather uncertain situation in the Middle East and West Asia and its implications for oil prices. Aftar having net bought equities worth $1.64 Billion in the previous week, the FPIs changed tack to end up net sellers to the tune of $2.23 Billion in the latest week to April 19, 2024. This week is a lot more representative as it shows the risk of the West Asian conflict. However, the global risks were also highlighted by the VIX moving up from 11.53 to 13.46 levels during the week.


For the latest week to April 19, 2024, FPIs were net sellers of $2,229 Million, after being net buyers of $1,641 Million in the previous week. In the 3 weeks prior to that, FPIs net sold $713 Million in equities. Here are 6 key data points that influenced FPI flows this week.

  • India WPI inflation came in higher at 0.53% for March 2024. That was along expected lines as the pressure was visible in wholesale food and fuel inflation. For FY24 as a whole, the WPI inflation was still negative at -0.70%. The good news is that this bounce in WPI inflation obviates the risk of price deflation and manufacturing losses.
  • The trade data for the month of March 2024 and for FY24 were announced in the week. The trade deficit for March was at a 1-year low of $15.6 Billion even as the overall services surplus remained robust. The full year overall deficit came in at just $78 Billion, which would mean that the current account deficit for FY24 should be in the vicinity of 1% of GDP. That is a comfortable situation to be in.
  • The RBI MPC announced the minutes of the April Fed meeting with the members clearly veering towards a wait-and-watch approach to rates. Apart from Jayanth Varma, the other 5 members of the MPC were in favour of holding rates for now and take a view on rates only after inflation had decisively moved towards 4% and food inflation sobered.
  • The Fed speak during the week has reduced the probability of rate cuts to just about one rate cut in this year. During the week, Bostic, Mester and Neil Kashkari showed a preference to keep rate cuts on hold due to the fluid geopolitical situation in the Middle East and West Asia. As a result, even the CME Fedwatch appears to be now hinting at a 50% probability that there would be just one rate cut in the current calendar year.
  • The week saw a sharp fall in crude prices on Friday. After hovering around $90/bbl for most of the week, Friday saw a sharp fall in crude prices to $87/bbl amidst hopes that there could be an amicable resolution in the Middle East and West Asia. However, if that turns out to be wishful thinking, it could be negative for FPI flows in the coming week.
  • In key quarterly results, the numbers of Infosys and HDFC Bank were disappointing. Infosys saw the profit growth coming purely from the tax refunds, even as guidance in revenue growth at 1-3% was below average. HDFC Bank saw net profits sequentially flat in Q4FY24, despite ₹7,340 Crore exceptional gains from the sale of stake in HDFC Credila. The action pivot will shift to key results like Reliance and HUVR next week.

The week has been tumultuous in terms of FPI flows and the Q4 results have shown a good deal of pressure. Not surprisingly, FPIs were far from impressed during the week!


Here is the last 4 rolling weeks data on FPI flows as it shows us a time series moving average of FPI flows.

Date FPI Flow (₹ Crore) Cumulative flows FPI Flow($ Million) Cumulative flow
25-Mar-24 0.00 0.00 0.00 0.00
26-Mar-24 -3,871.43 -3,871.43 -464.45 -464.45
27-Mar-24 -3,170.59 -7,042.02 -380.37 -844.82
28-Mar-24 4,042.50 -2,999.52 485.14 -359.68
29-Mar-24 0.00 -2,999.52 0.00 -359.68
01-Apr-24 0.00 -2,999.52 0.00 -359.68
02-Apr-24 2,355.23 -644.29 282.49 -77.19
03-Apr-24 -447.29 -1,091.58 -53.66 -130.85
04-Apr-24 -1,254.92 -2,346.50 -150.43 -281.28
05-Apr-24 -977.66 -3,324.16 -117.16 -398.44
08-Apr-24 1,915.09 -1,409.07 229.61 -168.83
09-Apr-24 0.00 -1,409.07 0.00 -168.83
10-Apr-24 8,526.56 7,117.49 1,023.38 854.55
11-Apr-24 0.00 7,117.49 0.00 854.55
12-Apr-24 3,230.38 10,347.87 388.15 1,242.70
15-Apr-24 -7,937.77 2,410.10 -952.09 290.61
16-Apr-24 -3,233.48 -823.38 -387.51 -96.90
17-Apr-24 0.00 -823.38 0.00 -96.90
18-Apr-24 -3,264.73 -4,088.11 -390.99 -487.89
19-Apr-24 -4,163.15 -8,251.26 -498.48 -986.37

Data Source: NSDL

After an interlude of FPI buying in the previous week, FPIs were back to being net sellers in the latest week. After 3 weeks of FPI outflows of $39 Million, $360 Million, and $314 Million; the previous week to April 12, 2024 saw net FPI inflows of $1,641 Million. However, the latest week to April 19, 2024 saw net FPI selling of $2,229 Million. The geopolitical turmoil in West Asia is surely taking its toll. Here is a quick run-down.

  • In previous 5 rolling weeks, FPIs had seen net inflows of $1,641 Million, net outflows of $39 Million, $360 Million, $314 Million, and net inflows of $3,488 Million. The latest week to April 19, 2024 saw net FPI outflows of $2,229 Million from equities. The outflows in the latest week more than offset the net buying in the previous week, showing that geopolitics was taking its toll.
  • If you look at the last 4 rolling weeks on a cumulative basis, total net FPI outflows from equities were at ₹(8,251) Crore or ($986) Million. This number has shifted to negative zone, after being in positive territory for 7 weeks in a row. The week also saw some aggressively selling by FPIs in debt, with IPOs the only redeeming feature of the week.


There will be 3 key triggers for FPI flows in the coming weeks.

  • The quarterly results will be the key driving factor for FPI flows in the coming week. In the previous week, the quarterly results of Infosys and HDFC Bank had disappointed as the profit growth had come from exceptional gains. The coming week has critical numbers of Reliance and Hindustan Unilever; which will set the tone for FPI flows.
  • Needless to say, the geopolitical situation in the Middle East and West Asia will continue to dictate the direction of the markets and the FPI flows in the coming week. FPIs are likely to be concerned about the sharp spike in VIX as the elections get underway in India. The situation looks fluid but and risks are likely to see panic reaction from FPIs.
  • There are two big data points in the coming week from the US markets. The Bureau of Economic Analysis (BEA) will announce the first estimate for Q1-2024 GDP as well as the PCE inflation for March 2024. The GDP is expected to grow at 2.5%, while the PCE inflation is likely to edge up in line with CPI inflation. Both could only push the Fed farther away from any kind of dovish rate action and could hold the key to FPI flows.

FPI flows in the coming weeks will determine the confidence that FPIs are willing to repose on the India story, amidst the rising tide of geopolitical risks. Valuations are already stiff, VIX is spiking and Q4 results have not been flattering. It is going to be a tough task to keep the FPIs interested in the India story in the coming week.

Related Tags

  • Foreign Investors
  • FPIs
  • nifty
  • PortfolioFlows
  • RBIPolicy
  • sensex
  • StockMarkets
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