FPIS NET EQUITY BUYERS FOR FOURTH SUCCESSIVE WEEK
After infusing $1.41 Billion, $1.83 Billion, and $1.72 Billion in the three previous weeks, the FPI flows continued in the latest week to July 05, 2024. However, the inflows were relatively subdued at $953 Million for the week, although that was amidst 2 days of FPI selling during the week. For the last 4 weeks since the new government has been formed at the centre, the FPI flows have been to the tune of $5.91 Billion. That is not exactly a deluge, but the are showing a decisive turn in FPI sentiments towards investing in India. The formation of the Modi 3.0 government was initially met with some scepticism in the markets as it was a coalition government, where the ruling BJP was well short of the half-way mark. However, coalitions are nothing new and India had seen coalition governments for 25 years between 1989 and 2014. It is only the in last two terms that we have seen majority governments.
Post the new government taking shape, the prime minister and the finance minister have made the right noises about the reforms being on track: and that has helped turn the sentiments for FPIs. Valuations may still be a concern, but the indication is that these FPI flows should turn into a deluge, once the US Fed cuts its benchmark rates. In the last few weeks (even prior to the election outcome), several macro pointers have been very favourable. GDP growth for FY24 came in at 8.2%, the fiscal deficit was pruned further in FY24 to 5.6% of GDP, and the current account deficit (CAD) showed a surplus in Q4 and the deficit was restricted to just 0.7% of GDP in FY24. All in all, the FPIs have a lot to cheer about India. A Fed rate cut, supported by the RBI dropping rates, should be the next big trigger.
FED MINUTES COULD HAVE DONE A LOT MORE
The one major disappointment in the week would be that the Fed could have actually done a lot more. However, if the latest FOMC minutes published during the week showed that the Fed continues to be ambivalent. It is not that rate cuts are not justified. It is just that the Fed can afford to continue with the current situation for more time, and that is exactly what the Fed is doing. This time around, even the data was ripe for a rate cut. Overall, the inflation had been structurally contained and the much-feared hard landing had been averted. On a shorter time scale, the Q1 GDP growth for the US economy came in at 1.3% compared to 4.9% in Q3-FY23 and 3.4% in Q4-FY24. That shows the US economy slowing in sync with the 2% inflation level expected. The labour market is now more in balance with wage hikes under control. Above all, the PCE inflation was now at 2.6%, with energy inflation the only challenge. Being the undisputed leader in world oil production, the US has less to worry on that front. However, despite these apparent advantages, the Fed opted for status quo. Now the markets are waiting for September, but June FOMC was an opportunity missed.
MACRO FPI FLOW PICTURE UP TO JULY 05, 2024
The table captures monthly FPI flows into equity and debt for 2022, 2023, and 2024.
Calendar
Month |
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) | (23,331.04) | 14,659.77 | (8,671.27) | (7,588.75) | (16,260.02) |
May-2024 (₹ Crore) | (30,613.87) | 5,027.54 | (25,586.33) | 12,675.47 | (12,910.86) |
Jun-2024 (₹ Crore) | 24,345.55 | 2,218.99 | 26,564.54 | 15,192.90 | 41,757.44 |
Jun-2024 (₹ Crore) # | 9,108.91 | (1,146.66) | 7,962.25 | 6,166.24 | 14,128.49 |
Total for 2024 (₹ Crore) | (23,396.52) | 34,559.36 | 11,162.84 | 92,771.90 | 1,03,934.74 |
For 2024 ($ Million) | (2,784.73) | 4,155.07 | 1,370.34 | 11,162.75 | 12,533.09 |
# – Recent Data is up to July 05, 2024 |
Data Source: NSDL (Negative figures in brackets)
FPIs remained aggressive net buyers in the week to July 05, 2024 at $953 Million; after being net buyers to the tune of $1,724 Million, $1,825 Million, and $1,405 Million in the previous 3 weeks. For calendar 2024 so far, FPIs were net buyers to the tune of $12,533.09 Million. Out of this figure, FPIs net bought equities worth $1,370.34 Million and were net buyers in debt to the tune of $11,162.75 Million. For 2024, till date, net debt market inflows accounted for 89.1% of the total net FPI flows into India. In short, year 2024 has been more about debt flows and less about equity flows. As of the close of July 05, 2024, the FPIs were still net sellers in secondary market equities worth $(2,784.73) Million, while the buying in IPOs more than compensated for that at $4,155.07 Million.
In the latest week to July 05, 2024, FPIs were again net buyers worth $953 Million. This is positive for the fourth week in a row, albeit subdued. The net FPI inflows into equity in the last 3 weeks were $1.72 Billion, $1.83 Billion, and $1.41 Billion. Prio to the new government formation, the FPIs were persistently on the sell side, when it came to Indian equities. Clearly, sentiments have shifted sharply in the last 4 weeks post the government formation. Apparently, the FPIs are now waiting for some positive news flows on Fed rate cuts.
FPI SENTIMENTS – THE WEEK THAT WAS
For the latest week to July 05, 2024, FPIs were net buyers to the tune of $953 Million. For 4 weeks in a row, the FPIs have been net buyers in equity; infusing $5.91 Billion in the process. Here is what drove FPI sentiments this week.
It was a relatively quiet week for data flows, but the coming week will see some key data points in India like mutual fund flows, CPI inflation and IIP growth. That could be interesting.
DAILY FPI EQUITY FLOWS FOR LAST 4 ROLLING WEEKS
Here is the last 4 rolling weeks data on FPI flows as it shows us a time series moving average of FPI flows.
Date | FPI Flow (₹ Crore) | Cumulative flows | FPI Flow($ Million) | Cumulative flows |
10-Jun-24 | 5,355.83 | 5,355.83 | 641.99 | 641.99 |
11-Jun-24 | 2,867.87 | 8,223.70 | 343.49 | 985.48 |
12-Jun-24 | 57.02 | 8,280.72 | 6.83 | 992.31 |
13-Jun-24 | 679.33 | 8,960.05 | 81.30 | 1,073.61 |
14-Jun-24 | 2,770.42 | 11,730.47 | 331.60 | 1,405.21 |
17-Jun-24 | 0.00 | 11,730.47 | 0.00 | 1,405.21 |
18-Jun-24 | 3,234.51 | 14,964.98 | 387.15 | 1,792.36 |
19-Jun-24 | 1,576.35 | 16,541.33 | 188.82 | 1,981.18 |
20-Jun-24 | 9,175.54 | 25,716.87 | 1,099.85 | 3,081.03 |
21-Jun-24 | 1,247.64 | 26,964.51 | 149.38 | 3,230.41 |
24-Jun-24 | 1,797.66 | 28,762.17 | 215.07 | 3,445.48 |
25-Jun-24 | 860.42 | 29,622.59 | 103.03 | 3,548.51 |
26-Jun-24 | 2,464.98 | 32,087.57 | 295.47 | 3,843.98 |
27-Jun-24 | 1,513.23 | 33,600.80 | 181.13 | 4,025.11 |
28-Jun-24 | 7,757.97 | 41,358.77 | 929.22 | 4,954.33 |
01-Jul-24 | 1,553.37 | 42,912.14 | 186.14 | 5,140.47 |
02-Jul-24 | -494.08 | 42,418.06 | -59.24 | 5,081.23 |
03-Jul-24 | -2,507.09 | 39,910.97 | -300.20 | 4,781.03 |
04-Jul-24 | 3,898.51 | 43,809.48 | 466.70 | 5,247.73 |
05-Jul-24 | 5,511.54 | 49,321.02 | 660.05 | 5,907.78 |
Data Source: NSDL
FPIs were net buyers for the fourth week in a row, with the political uncertainty coming to an end and the VIX stabilizing. Here are some key FPI data takeaways.
TRIGGERS FOR FPI FLOWS IN COMING WEEKS?
While the broad focus of the FPIs would be on the full budget, the other big data point of interest would be the corporate results for the first quarter; which will start for the blue chips from this week. But the real story that the FPIs will be looking for is whether the government continues its reformist approach in the July budget too. The Fed language on future rates trajectory will matter too.
Related Tags
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Securities Support WhatsApp Number
+91 9892691696
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
Invest wise with Expert advice