With over Rs 55,000 crore net purchase of equities, foreign institutional investors (FIIs) have turned net buyers for the year 2020.
So far in November, FIIs have made net purchase worth Rs 55,576.84 crore including Rs 24.20 crore on Wednesday, the highest ever in a month.
Buoyed by the fund flow, both Sensex and Nifty have off late been on a record run and hit fresh highs. On Wednesday, the BSE Sensex touched an all-time high of 44,825.37, and the Nifty50 on the National Stock Exchange hit a fresh high of 13,145.85 points.
During January-April, FIIs pulled out a net amount of Rs 89,069.01 crore, with nearly Rs 66,000 crore being pulled out in March due to the initial fears and uncertainties over the pandemic.
However, post the announcement of measures to boost liquidity and provide stimulus globally, including in India, FIIs started coming back in May. Except a blip in September, FIIs have been net buyers since May.
This trend is the likely to continue at least in the near term, according to analysts.
A report by Kotak Institutional Equities showed that the September 2020 quarter witnessed Rs 46,900 crore of buying by foreign portfolio investors (FPI) and FPI holding, including ADR and GDR in the BSE-200 Index increased to $415 billion in the September 2020 quarter from $360 billion at the end of the June 2020 quarter.
“FPI ownership in the BSE-200 Index stood at 23.3 per cent in September 2020. FPIs were net buyers in banks, diversified financials, IT services and oil, gas and consumable fuels’ sectors. DIIs holding in the BSE-200 Index declined to 13.6 per cent in the September quarter from 14 per cent at the end of the June 2020 quarter,” it said.
DIIs, however, sold IT services, oil, gas and consumable fuels and pharmaceuticals sectors.
Currently too, DIIs have been on a selling spree and have been net seller off late, contrary to the investments by foreign investors.
So far in November, DIIs have made a net selling of Rs 39,950.17 crore of equities.
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