NEW DELHI: The value of FPIs (Foreign Portfolio Investors) holding in Indian equities reached $738 billion in the three months ended December 2023, marking a surge of 13 per cent from the preceding quarter, driven by the strong performance of the domestic stock market, as per a report by Morningstar.
The value of FPIs investment was at $651 billion in the September quarter of the current fiscal.
On a year-on-year basis, the value of such investments rose 26 per cent from $584 billion in December 2022.
“This could be attributed to the good performance of the domestic equity markets as well as strong net inflows from FPIs,” the report noted.
However, FPIs’ contribution to Indian equity market capitalisation fell marginally during the quarter under review to 16.83 per cent from 16.95 per cent in the previous quarter.
After withdrawing $5.38 billion in the September quarter, foreign investors were net buyers in the Indian equity markets to the tune of $6.07 billion in the three months ended December 2023 owing to the decline in US Treasury bond yields. Also, the listing of IPOs and the fall in crude prices brought foreign investors back.
“The Indian equity markets touched all-time high levels in January, which led FPIs to book some profits. Moreover, uncertainty over the interest-rate scenario led them to stay on the sidelines and wait for further cues before investing in emerging markets like India. Heavy selling by FPIs was also triggered by them offloading their stake in HDFC Bank given its disappointing quarterly results,” the report noted.