FPIs back to selling in first two weeks of 2023 after investing ₹94,877 crore in H2 2022

Jan 17, 2023

By: Rounak Jain

First two weeks of 2023 witness FPI sell-off

Foreign portfolio investors (FPIs) have sold equities worth ₹18,808 crore and bought bonds worth ₹238 crore in 2023 so far. The benchmark Nifty50 index declined 1.1 percent during this period.

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January sell-off weighs on rupee

FPI sell-off and US dollar purchases by banks have weighed on the rupee, according to a report by the Economic Times. The rupee is down 1.2 percent against the US dollar in 2023 so far.

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FPIs invested ₹9,446 crore in equities and bonds in December

In December, FPIs made a net purchase of ₹9,446 crore. While they bought ₹11,119 crore worth of equities, they sold bonds worth ₹1,673 crore. Top purchases were in FMCG (₹4,019 cr) and consumer services (₹3,650 cr). Top sales were oil & gas (₹2,784 cr) and IT (₹3,579 cr).

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FPIs invested a net ₹94,877 crore in the second half of 2022

FPIs turned net buyers in the last six months of 2022, investing ₹95,919 crore in equity, while bonds witnessed a withdrawal of ₹1,042 crore. The net flows stood at ₹94,877 crore in this period. The Nifty50 rose 14.7 percent in the period.

Credit: Business-Insider-India

Reversal from first half of 2022

FPI flows witnessed a reversal in the second half of 2022 from the first half, which saw FPIs pull out ₹2.32 lakh crore from equities and bonds. The benchmark Nifty50 fell 9.2 percent during this period.

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Top five sectors account for almost 90 percent of FPI investments in H2 2022

Financial services, FMCG, consumer services, healthcare, and capital goods were the top five sectors with net flows of ₹84,124 crore, accounting for 89 percent of the total FPI investments in the second half of 2022.

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Financial services sector accounted for a quarter of FPI inflows

The financial services sector alone accounted for a quarter of total FPI inflows, with investors pumping in ₹24,495 crore into the sector between July-December 2022.

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Strong inflows pump up the financial services index

Aided by strong inflows, the financial services index delivered robust returns of 22.7 percent between July-December 2022, outpacing the benchmark Nifty50’s 14.7 percent gains in the period.

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IT, oil & gas stocks witness a sell-off in H2 2022

FPIs offloaded IT, and oil & gas stocks in the second half of 2022, pulling out a total of ₹22,200 crore from these two sectors.

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Only four sectors witnessed net FPI outflows in the second half of 2022

Apart from IT, and oil & gas, the textiles and sovereign sectors witnessed a sell-off in the second half of 2022. FPIs were net buyers in the rest of the 20 sectors in this period.

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Other FPI favourites in second half of 2022

Apart from the top five sectors, FPIs invested a cumulative ₹27,435 crore in auto, telecom, construction, services and other sectors in the second half of 2022.

Credit: Canva

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