Mumbai, Aug 29 (IANS) Foreign portfolio investors (FPIs) bought equity worth Rs 30,918 crore this month (up to August 29), of which Rs 18,790 crore was through exchanges and Rs 12,128 crore was through ‘primary market and others’ category.

This is the second month in a row that FPIs have turned buyers in India.

The important factors driving the FPI flows into India are the reversal of the chip trade, the stability in the rupee and, more importantly, the improving earnings growth in India, said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.

A significant trend in FPI investment in India recently is the direction of flows towards the SMIDs (mid-and small-caps.)

Growth and earnings momentum are much higher in the SMIDs compared to the large-caps. This trend of FPI investment in SMIDs is likely to continue, the analyst noted.

On Friday, the FII selling pressure was largely countered by strong DII participation, with domestic institutions recording purchases of approximately Rs 5,184 crore, providing a cushion to the market.

On a month-to-date (MTD) basis, FIIs continue to remain marginal net buyers at around Rs 454 crore, marking a notable shift after several months of sustained foreign selling, said analysts.

Indian equity markets ended the week on a cautious note, extending their recent corrective phase as concerns over global interest rates, geopolitical uncertainty and volatility surrounding the new Closing Auction Session weighed on investor sentiment.

Although markets recovered sharply on Friday, supported by strong buying in IT stocks following upbeat global technology cues, the benchmark indices remained under pressure for the third consecutive week.

For the week, the Nifty declined around 0.31 per cent to close at 24,175.65, while the Sensex fell nearly 0.36 per cent to settle at 77,264.51.

On the domestic front, introduction of the Closing Auction Session (CAS) for F&O stocks also remained an important market development.

The monthly derivatives expiry witnessed sharp price movements during the closing auction, raising concerns regarding increased short-term volatility and price dislocations, particularly in heavyweight stocks, said Ajit Mishra–SVP, Research, Religare Broking Ltd.

Market breadth remained relatively resilient despite weakness in the benchmark indices and continued caution from foreign institutional investors (FIIs).

The Midcap and Smallcap indices gained during the week, indicating that domestic liquidity and stock-specific participation continue to provide support to the broader market, partly offsetting selective FII selling, said market participants.

–IANS

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