FPIs snap monthly selling streak in Indian equities in November: NSDL data

Bengaluru: Foreign portfolio investors (FPIs) bought Indian equities worth 9,001 crore ($1.08 billion) in November, snapping a two-month selling streak, data from the National Securities Depository (NSDL) showed.

Foreign selling had hit a nine-month high in the previous month as US Treasury yields hit 16-year highs and amid geopolitical concerns in the Middle East.

FPIs remained net sellers in the first half of November but turned buyers in the second half after soft US inflation data on November 14.

Comments by key Federal Reserve officials, including Chair Jerome Powell, added to rising odds of a Fed rate cut in March 2024, triggering a fall in US Treasury yields and a rally in global equities.

"FPIs sold off Indian equities in September and October due to global factors like a rise in crude prices, US rate concerns and geopolitical worries. All the three concerns have now receded, adding to the risk-on sentiment," said Sanjeev Hota, Vice President and head of research at Sharekhan by BNP Paribas.

India's Nifty 50 posted its biggest monthly gain since July 2022 in November, while the Sensex logged its best month in 2023, led by information technology and energy stocks.

What FPIs Bought in November

Consumer services, capital goods, realty and healthcare sectors witnessed the most buying in November. Realty stocks climbed 18.34 per cent in November.

FPIs were also net buyers in information technology stocks, reversing their selling in the first half of November.

The sector had seen outflows worth 3,262 crore amid weak results in October. The IT index added 6.54 per cent in November.

"The return of FPI inflows, along with persistent domestic institutional inflows, including money coming from the mutual fund route, have triggered a liquidity-driven rally in Indian markets," said Saurabh Jain, Assistant Vice President of research (retail equities) at SMC Global Securities.

($1 = 83.3500 Indian rupees)