FPIs pour ₹11,452 crore in financial services in the first half of November

FPIs pour ₹11,452 crore in financial services in the first half of November
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  • Foreign portfolio investors are bullish on the financial services sector, as per data for the first fortnight of November.
  • Financial services sector alone accounted for ₹11,452 crore, or nearly 40% of the ₹28,888 crore of net equity investments by FPIs in this period.
  • The sector also accounts for the highest assets under custody of FPIs, with a 32% share out of the total AUC of ₹49 lakh crore.
Foreign portfolio investors (FPIs) have taken a shine to the financial services sector in the first fortnight of November, investing ₹11,452 crore, or nearly 40% of their net equity investments in this period.

In the first fifteen days of November, FPIs have invested ₹28,888 crore in Indian equities – with 39.6% of this pumped into the financial services sector alone. The fast-moving consumer goods (FMCG) sector came a distant second – attracting equity inflows of ₹3,514 crore, followed by IT at ₹3,005 crore.

SectorFPI flows
Financial Services₹11,452 crore
FMCG₹3,514 crore
IT₹3,005 crore
Auto and auto components₹2,251 crore
Oil, Gas & Consumable Fuels₹1,765 crore
Others₹6,901 crore
Total₹28,888 crore

Source: NSDL, November 1-15, 2022 | FPI flows in equity segment

In terms of assets under custody (AUC), too, the financial services sector dominated the FPI allocations, with a share of 32% out of the total ₹49 lakh crore worth equity investments as on November 15, 2022.

SectorAssets under custody
Financial Services₹15,85,145 crore
Oil, Gas & Consumable Fuels₹5,65,227 crore
IT₹5,30,608 crore
FMCG₹3,18,667 crore
Auto and auto components₹2,68,885 crore
Others₹16,41,427 crore
Total₹49,09,959 crore


Source: NSDL, November 1-15, 2022 | AUC in equity segment

The first fortnight of November also recorded the most equity inflows of any month’s first fifteen days so far in 2022.

“FPIs have turned buyers over the last 1-2 weeks despite record valuation premium relative to both MSCI emerging markets and developed markets, deteriorating global growth outlook, and strengthening Dollar index,” HDFC Securities said in a report earlier this month.

The high FPI inflows also aligns with the performance of the benchmark indices between November 1 and 15 – while the Nifty50 gained 2.2%, the Sensex rose 1.9%.

In this period, the Nifty Bank index rose 2.6%, with two public sector banks in the list of top five performers.

BankChange in share price (Oct 31- to Nov 15)
Bank of Baroda10.3%
HDFC Bank8.2%
AU Small Finance Bank7.5%
State Bank of India4.7%
Federal Bank3.5%
Punjab National Bank3.1%
IDFC First Bank1.9%
IndusInd Bank0.9%
Kotak Mahindra Bank0.6%
ICICI Bank0.3%
Bandhan Bank-4.1%
Axis Bank-5.2%

Source: NSE

PSU banks’ strong Q2 performance results in rating upgrades

India’s 12 public sector banks reported a cumulative net profit of ₹25,685 crore in Q2, resulting in ratings upgrades from brokerages.

“September quarter earnings have been good, in fact, banks have done extraordinarily well. Credit growth is picking up for each and every bank, which means there will be investments. If the capex cycle starts, there will be growth in the future, so these are positive indicators,” Sharad Chandra Shukla, director, Mehta Equities, told Business Insider India.

He added that unless there are other geopolitical triggers or the US Fed decides to do another 75 bps rate hike, the FPI buying trends should continue in the near term.

Post its Q2 performance, state-run SBI has seen target price upgrades in the range of 14-29% compared to the current market price of ₹598 (November 22).

BrokerageTarget priceUpside
Goldman Sachs₹77029%
Morgan Stanley₹71520%
ICICI Direct₹70017%
HDFC Securities₹70017%
Credit Suisse₹68014%

$NIFTYFINSERVICE.NSE Index has been dealing with a multitude of patterns. Sometime in June, the fight was against a rather clear Head & Shoulders distribution pattern. However, a small breach and the Index rallied soon after. The breakdown was a small and a fake one and the rally that happens negating an H&S is usually a strong one as well. That turned out to be right as the index moved from 15k to 19k now. At this moment, it's yet again dealing with patterns as it currently hovers around the neckline of an Inverse H&S that's just below the resistance line of previous All Time High. It's now slowly moving to the inflection point where a breakout to either side becomes imminent and the direction of the next 20% move becomes clear. Break above red being Bullish and break below Blue being Bearish.

— (@piyushchaudhry) November 21, 2022


PSU banks’ robust Q2 performance ring in analyst upgrades – Rising rivalry for deposits a concern in the medium term

FPIs pour ₹28,888 crore into equities in the first fortnight of November

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