After remaining net buyers for straight fourteen sessions in May 2023, foreign institutional investors (FIIs) finally tuned net sellers on Friday in the week gone by. However, despite selling Indian stocks worth ₹113.46 crore in cash on the weekend session, FIIs are still net buyers in this month as they have bought stocks worth ₹17,376.31 crore in the Indian stock market this month. In fact, FIIs have remained net buyers in the month of March and April 2023 as well. In March 2023, FIIs bought shares worth ₹1,997.70 crore whereas in April 2023, they bought stocks worth ₹5,711.80 from the Indian stock market.
After remaining net buyers for straight fourteen sessions in May 2023, foreign institutional investors (FIIs) finally tuned net sellers on Friday in the week gone by. However, despite selling Indian stocks worth ₹113.46 crore in cash on the weekend session, FIIs are still net buyers in this month as they have bought stocks worth ₹17,376.31 crore in the Indian stock market this month. In fact, FIIs have remained net buyers in the month of March and April 2023 as well. In March 2023, FIIs bought shares worth ₹1,997.70 crore whereas in April 2023, they bought stocks worth ₹5,711.80 from the Indian stock market.
According to stock market experts, FIIs are bullish on Indian stock market as US dollar has been nosediving for the last two and half months and treasury yield has gone down in this time as well. They said that sanction crisis in Russia, energy crisis in Europe, China turning a dubious black box after the Covid pandemic and economic crisis in the US are together making a conducive environment for the FIIs to look at Indian stock markets and they are doing the same in a cautions manner. Stock market experts went on to add that strong Q4 result season in India has established among investors that growth and demand theme is still intact in Indian economy that may continue to support India Inc in delivering strong quarterly numbers in upcoming result seasons.
According to stock market experts, FIIs are bullish on Indian stock market as US dollar has been nosediving for the last two and half months and treasury yield has gone down in this time as well. They said that sanction crisis in Russia, energy crisis in Europe, China turning a dubious black box after the Covid pandemic and economic crisis in the US are together making a conducive environment for the FIIs to look at Indian stock markets and they are doing the same in a cautions manner. Stock market experts went on to add that strong Q4 result season in India has established among investors that growth and demand theme is still intact in Indian economy that may continue to support India Inc in delivering strong quarterly numbers in upcoming result seasons.
Experts list out these top five reasons that has made FIIs highly bullish on Indian stock markets:
Experts list out these top five reasons that has made FIIs highly bullish on Indian stock markets:
Weakness in US dollar
“In last two and half months, US dollar has remained an ideal ‘sell on rise’ asset for investors. Dollar Index has retraced from record 111 levels to around 103 levels in this time. In fact, Dollar Index may further go down towards 98 and 96 levels, once it breaches the current support placed at 100 levels. Hence, FIIs have fished out their money from the currency market and pushing into the equities,” said Anuj Gupta, Vice President — Research at IIFL Securities.
Weakness in US dollar
“In last two and half months, US dollar has remained an ideal ‘sell on rise’ asset for investors. Dollar Index has retraced from record 111 levels to around 103 levels in this time. In fact, Dollar Index may further go down towards 98 and 96 levels, once it breaches the current support placed at 100 levels. Hence, FIIs have fished out their money from the currency market and pushing into the equities,” said Anuj Gupta, Vice President — Research at IIFL Securities.
Dip in treasury yield
“Due to weakness in US dollar, treasury yield in the US and other markets have tumbled and hence investors are switching from these assets to their traditional equity and index funds. As Indian equity market is available at discounted price, FIIs are pumping their money in Indian stock market in an aggressive manner,” said Anuj Gupta of IIFL Securities.
Dip in treasury yield
“Due to weakness in US dollar, treasury yield in the US and other markets have tumbled and hence investors are switching from these assets to their traditional equity and index funds. As Indian equity market is available at discounted price, FIIs are pumping their money in Indian stock market in an aggressive manner,” said Anuj Gupta of IIFL Securities.
Sanctions on Russia
India and Russia’s suspension of talks for bilateral trading arrangements in Indian rupees has effected Indian currency negatively. The decision to suspend talks came as India has been importing discounted oil from Russia in huge quantities. Since Russia invaded Ukraine on Feb 24, 2002, our total oil imports have swelled to $51.3 billion as compared to 10.6 billion in the same period before the invasion.
Sanctions on Russia
India and Russia’s suspension of talks for bilateral trading arrangements in Indian rupees has effected Indian currency negatively. The decision to suspend talks came as India has been importing discounted oil from Russia in huge quantities. Since Russia invaded Ukraine on Feb 24, 2002, our total oil imports have swelled to $51.3 billion as compared to 10.6 billion in the same period before the invasion.
“This suspension of talks with the Indian and Russian counterparts is going to put Indian National Rupee (INR) under pressure and hence FIIs are expected to get higher return on their money in coming times due to depreciation of rupee against the US dollar,” said Avinash Gorakshkar, Head of Research at Profitmart Securities. He said that after the sanctions imposed on Russia after Ukraine war, FIIs are not in mood to park their money there.
“This suspension of talks with the Indian and Russian counterparts is going to put Indian National Rupee (INR) under pressure and hence FIIs are expected to get higher return on their money in coming times due to depreciation of rupee against the US dollar,” said Avinash Gorakshkar, Head of Research at Profitmart Securities. He said that after the sanctions imposed on Russia after Ukraine war, FIIs are not in mood to park their money there.
“After Ukraine crisis, entire European Union is facing energy crisis as supply of gas energy has been stopped by Russia due to sanctions imposed on them,” said Avinash Gorakshkar.
“After Ukraine crisis, entire European Union is facing energy crisis as supply of gas energy has been stopped by Russia due to sanctions imposed on them,” said Avinash Gorakshkar.
Skepticism about China and Brazil
Avinash Gorakshkar went on to add that after covid-19 pandemic, China has become a doubtful black box and hence investors are not comfortable investing there. Similarly, Brazil is facing political uncertainty and hence FIIs are finding more comfort while investing in the Indian stock markets.
Skepticism about China and Brazil
Avinash Gorakshkar went on to add that after covid-19 pandemic, China has become a doubtful black box and hence investors are not comfortable investing there. Similarly, Brazil is facing political uncertainty and hence FIIs are finding more comfort while investing in the Indian stock markets.
Strong Q4 results
“Despite looming economic recession fears in the US, Indian companies have reported strong Q4 results and a good number of Indian listed companies have delivered better-than-expected Q4 results. This is a sign that growth and demand is still intact in Indian economy and this is enough for the FIIs to look at Indian stock market and they doing the same for last one and half months,” said Vaibhav Kaushik, Research Analyst at GCL Broking.
Strong Q4 results
“Despite looming economic recession fears in the US, Indian companies have reported strong Q4 results and a good number of Indian listed companies have delivered better-than-expected Q4 results. This is a sign that growth and demand is still intact in Indian economy and this is enough for the FIIs to look at Indian stock market and they doing the same for last one and half months,” said Vaibhav Kaushik, Research Analyst at GCL Broking.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
