Pace of FPIs equity selling slows in Feb so far, outflow over ₹2,300 cr

Foreign portfolio investors (FPIs) continue to stay as net sellers so far in February, however, the pace of selling has slowed down compared to the previous month. An outflow of more than ₹2,300 crore was recorded in Indian equities by FPIs. These foreign investors showed appetite in stocks of financials, capital goods, IT, and healthcare sectors. Meanwhile, the selloff by foreign institutional investors is to the tune of over ₹4,500 crore.

As per NSDL data, FPIs sold ₹2,313 crore in domestic equities between February 1st to 24th. There are two more trading days left in February month.

So far, the pace of selling is lower compared to the outflow of ₹28,852 crore in January 2023 month.

Dr.V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “FPIs continue to be on sale mode in February, too. FPIs sold equity for ₹2627 crores in February. Relative to January, the pace of selling has come down.”

Vijayakumar also cited CDSL data which showed that for 2023, through 24th February FPIs have sold equity for ₹31,164 crore.

In regards to sector-wise buying, Vijayakumar said, “there is a clear change in the sell portfolio. In the first half of February, FPIs turned buyers into financials. They were selling in financials in January. Also, FPIs bought capital goods, IT, and healthcare in the first half of February. They sold oil & gas, metals, and power.”

Year-to-date, FPIs outflow in the equity market is approximately ₹31,165 crore, NSDL data showed.

While equities witnessed outflow, FPIs have stayed as net buyers in the debt market. So far in February, the inflow in the debt market is about ₹2,819 crore. In January, the inflow was around ₹3,531 crore.

Meanwhile, foreign institutional investors (FIIs) pulled out a whopping ₹4,508.91 crore from equities in the current month, till February 24th. FIIs sold ₹41,464.73 crore in equities during January, as per Stock Edge data.

This week, FIIs have removed ₹3,100.55 crore from Indian stocks. Except for Tuesday, FIIs were net sellers throughout the week.

Geojit strategist added, “Last week bond yields in the US continued to rise in anticipation of the Fed turning more hawkish in the context of the slow disinflation in the U S. Rising rates in the US might lead to more capital outflows from emerging markets. South Korea and Taiwan witnessed good capital inflows this month.”

On Friday, Sensex and Nifty 50 extended their sixth consecutive day drop, while ending below 59,500 and 17,500 levels. Riding on the back of the bearish market, more than ₹6.86 lakh crore of investors’ wealth has been eroded this week.

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