Investment in the Indian capital markets through participatory notes slightly dropped to Rs 96,292 crore at the end of December 2022 from the preceding month on higher valuation of domestic markets. Before the decline, the investment through the route had been on an increasing trend since July because of a slump in prices of oil and other commodities and relative outperformance of Indian equity markets. Participatory notes (P-notes) are issued by registered Foreign Portfolio Investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly.
Global funds, according to Christopher Wood, global head of equity strategy at Jefferies, are now beginning to pay more attention to India with the market now offering 30 companies with a market capitalisation over $25 billion.
'The minimum holding period for equities should be three years.' 'Try goal-based investing.' 'Link your equity portfolios to specific goals such as retirement, purchase of a house or car...'
Wipro, Power Grid, Larsen & Toubro, Mahindra & Mahindra, Tech Mahindra, NTPC, Titan, Tata Consultancy Services and HCL Technologies were among the other major winners. Bajaj Finance, IndusInd Bank, Asian Paints, Hindustan Unilever, Axis Bank, ICICI Bank, Reliance Industries and HDFC Bank were among the laggards.
Despite the narrowing spread of yields between the benchmark 10-year Indian government bond and the 10-year US Treasury bond, foreign portfolio investors (FPIs) are continuing to invest in the domestic debt market this year -- a trend backed by a stable currency and a less volatile bond market. FPIs have been net buyers in the debt market in 2023 so far, marking the first time since 2019. The yield spread between the 10-year Indian government bond and the 10-year US Treasury note stood at 3.14 per cent on August 8 - the narrowest in over a decade.
Foreign portfolio investors' (FPIs') net investment in the domestic debt market in October was the third highest during the current calendar year as foreign investors rushed to lock in higher returns amid global uncertainty and geo-political tensions, market participants said. FPI inflows in debt stood at Rs 6, 322 crore in October against Rs 768 crore in September, according to data on the National Securities Depository Limited (NSDL). Market participants said that the majority of the inflows were channelled through corporate bonds.
Dalal Street had a roller coaster ride in 2024 from shattering record after record to facing heavy correction off-late but equity markets still rewarded investors with positive returns, driven by a surge in domestic fund flows and a resilient macro landscape. The first half of the year saw robust corporate earnings, a surge in domestic flows, and a resilient macro landscape, driving the Nifty to an all-time high of 26,277.35 in September 2024, according to Motilal Oswal Wealth Management.
The biggest bounce is in the realty sector, where the industry index jumped 80%. There's been a turnaround also in automobiles and ancillaries (up 45%). The pharma and health care indices have a welcome return of roughly 35%.
Currently, FPIs can invest up to $30 billion in Government securities, of which $5 billion is reserved for long-term investors.
Among the Sensex firms, ITC, Tata Consultancy Services, Wipro, Asian Paints, HCL Technologies, HDFC, Kotak Mahindra Bank, Bajaj Finance, Infosys, Sun Pharma, Hindustan Unilever, Power Grid, Reliance Industries and HDFC Bank were the winners. HCL Technologies climbed 1 per cent after the company on Thursday posted a 10.85 per cent increase in consolidated net profit to Rs 3,983 crore for the fourth quarter of 2022-23. Tech Mahindra, Maruti, Tata Steel, UltraTech Cement, Tata Motors and ICICI Bank were among the laggards.
Domestic mutual funds (MFs) have underpinned demand for most public floats this year, dominated by small- and mid-sized initial public offerings (IPOs). Of the 24 IPOs that have hit the market so far this financial year (2023-24, or FY24), MFs have played the role of 'anchor investors' in 20. They have subscribed to over 40 per cent, or Rs 2,850 crore, worth of shares of the Rs 6,900 crore on offer in the anchor category, according to data provided by PRIME Database, a firm that tracks primary market data.
Session-wise data indicates small investors have taken money off the table in more sessions than they have pumped in additional capital.
In a dazzling resurgence, foreign investors have graced the Indian equity markets with an influx of nearly Rs 1.5 lakh crore in 2023, fuelled by optimism over the country's resilient economic fundamentals amid shadows of a gloomy global scenario. Experts believe that the positive trend may continue in 2024. This follows Indian equities witnessing the worst-ever net outflow of Rs 1.21 lakh crore by FPIs in 2022 on aggressive rate hikes by the central banks globally after net inflows for three consecutive years.
Foreign portfolio investors (FPIs) remained net buyers for the third month in a row by investing Rs 68,558 crore in Indian markets as global investors continued betting on emerging markets. For the equity segment, this is the highest quantum of money invested ever since the FPI data has been made available by the National Securities Depository Ltd. The second highest amount into equities was invested by FPIs in November, when they had pumped in Rs 60,358 crore.
Mutual funds' equity buying remained elevated for the fifth consecutive month in December, taking the net equity purchase past Rs 1.7 trillion in 2023. The aggressive buying in December indicates that flows into equity funds are likely to have remained unaffected by the sharp run-up in the market last month. Mutual funds (MFs) bought equities worth Rs 23,000 crore last month (until December 28) compared to Rs 18,000 crore in November, shows data from the Securities and Exchange Board of India (Sebi).
The fall was led by banking stocks, with IndusInd Bank, Kotak Bank, Federal Bank, Axis Bank, ICICI Bank, HDFC Bank and SBI declining up to 2.36 per cent.
BSE (formerly Bombay Stock Exchange) has seen its market share go past the critical 20 per cent mark in the derivatives segment, intensifying its battle with bigger rival - the National Stock Exchange (NSE) - which, less than a year ago, had a monopoly in this space. In April, the average daily trading volume (ADTV) for BSE stood at Rs 89 trillion, accounting for 20.6 per cent of the overall ADTV of Rs 432 trillion (based on notional volumes for options).
These sectors have underperformed the wider market over the past year and are seen having far more upside potential if the economy picks up thanks to Modi's reformist agenda.
The domestic equity market on Thursday snapped the five-day losing streak as the benchmark Sensex recouped its lost ground and closed 78 points higher on fag-end value buying in banking, energy and financial stocks. A positive opening in the European market helped the investor sentiments even as clouds hovered over the health of the global banking system amid Credit Suisse woes and bank failures in the US. Halting its five-day losing streak, the 30-share BSE benchmark rose 78.94 points or 0.14 per cent to close at 57,634.84 points, with 17 of its constituents ending in the green.
The Reserve Bank of India's interest rate decision, domestic macroeconomic data and global trends will dictate terms in the equity markets this week, analysts said. Trading activity of Foreign Portfolio Investors (FPIs) will also influence markets, they added. "The Indian market will be closely monitoring the Reserve Bank of India's Monetary Policy Committee (MPC) meeting scheduled for June 6-8, 2023. Aside from that, market participants will be keeping an eye on the progress of monsoon," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.
More than half a dozen companies will hit the market with their initial public offerings (IPOs) between now and the end of next week. The cumulative amount raised from these IPOs is expected to be around Rs 8,000 crore. Stationery products firm DOMS Industries and home financier India Shelter Finance's IPOs - of Rs 1,200 crore each - got off to a flying start on Wednesday (December 13), with the former garnering over six times the subscription and the latter getting 1.5 times subscribed.
Both indices are down nearly 9 per cent from their all-time highs in mid-January. A sharp reversal seems difficult this time as the peak impact of the virus is yet to play out.
Foreign portfolio investors (FPIs) pulled out as much as Rs 17,537 crore from the Indian markets in just three trading sessions of March as investors' sentiment got dented by the uncertainty triggered by the Russia-Ukraine conflict and rising crude oil prices. As per depositories data, they pulled out Rs 14,721 crore from equities, Rs 2,808 crore from debt segment and Rs 9 crore from hybrid instruments between March 2-4. This took the total net outflow to Rs 17,537 crore.
Equity benchmark indices Sensex and Nifty settled lower for the sixth straight session on Monday due to heavy selling in bellwether stocks including HDFC Bank and Reliance Industries amid mixed trends in the global markets and outflow of foreign funds. Falling for the sixth consecutive session, the BSE Sensex tumbled 638.45 points or 0.78 per cent to settle at 81,050. During the day, it plummeted 962.39 points or 1.17 per cent to 80,726.06. The NSE Nifty slumped 218.85 points or 0.87 per cent to end at 24,795.75.
A delegation of high-level executives from US public pension funds (non-profit and government sectors) is visiting India next week to assess and familiarise themselves with the investment opportunities in the country. These executives belong to various American states and cumulatively represent $1.8 trillion in assets under management (AUM) invested across the US and global markets. The United States (US) mission to India, which includes its embassy and consulates and the Department of Treasury, along with India's Ministry of Finance and the National Investment and Infrastructure Fund (NIIF), is hosting the delegation.
The ideal time to invest in sector funds, is during a downturn so that investors can capitalise on a turnaround in 1.5 to 2 years.
As many as 31 mainboard IPOs raised a cumulative Rs 26,272 crore in this period, according to Prime Database. During the April-September 2007 bull run, 48 IPOs totalling Rs 21,243 crore were launched. The number of deals in H1FY24 was 2.2 times that of the same period of the last fiscal year, but the amount raised was 26 per cent lower.
In January, overseas investors had pumped in Rs 33,688.19 crore (Rs 336.88 billion) in Indian debt and equities.
The value of foreign portfolio investors' (FPI) holdings in the domestic equities reached $584 billion at the end of December 2022, which was 11 per cent lower from preceding year, according to a Morningstar report. This was largely on low return given by the Indian equities and exodus of foreign money from the domestic stock market. Going by the report, the value of FPIs investments in Indian equities dropped to $584 billion as of December 2022 as compared to $654 billion at the end of December 2021.
Notwithstanding concerns about lofty valuations, smallcaps recorded their most significant monthly gain in nearly three years in November. The National Stock Exchange Nifty Smallcap 100 finished the month with a 12 per cent gain, the most since February 2021 when it rose by 12.2 per cent. After declining by 4.1 per cent in the preceding month, the Nifty Midcap 100 rose by 10.4 per cent, the most since July 2022.
The benchmark Nifty and Sensex could see another 8-10 per cent from the current levels, said HDFC Securities in its outlook for equity markets in 2024. The brokerage said that the market movement in the next year will not be linear, and there will be more volatility. When asked about the market reaction to the General Elections in 2024, Dhiraj Relli, managing director and CEO of HDFC Securities, said more than the outcome of the elections, the market movement in the next three to four months will decide the market trajectory post elections.
'We emphasise the importance of not basing investment decisions solely on electoral outcomes.' 'Instead, focusing on investing in high-quality businesses capable of prospering regardless of the political landscape is paramount.'
The value of the foreign portfolio investors (FPI) holdings in the domestic equities reached $592 billion in three months ended June 2021, a surge of 7 per cent from the preceding quarter, according to a Morningstar report. This was largely on the back of robust net inflows from FPIs, coupled with the strong performance of the Indian equity markets. "As of the quarter ended June 2021, the value of FPI investments in Indian equities stood at $592 billion, which was considerably higher than the $552 billion recorded in the previous quarter, a spike of around 7 per cent," the report noted. As of June 2020, the value of FPI investments in Indian equities had been $344 billion.
Among the Sensex firms, Wipro, Axis Bank, Titan, UltraTech Cement and HDFC Bank, HDFC, HCL Tech and Reliance were the gainers.
MF investors may not be able to support markets fall if selling intensifies
Markets regulator Sebi has simplified the procedural requirements for onboarding of Foreign Portfolio Investors (FPIs) in a bid to facilitate ease of doing business and to reduce the time taken for their registration. The regulator allowed designated depository participants (DDPs) to grant FPI registration on the basis of scanned copies of application forms and supporting documents, according to a circular issued on Monday. Granting of registration on the basis of scanned copies has been allowed but trading can only be activated following the verification of the physical documents, it said.
'Quality of management, corporate governance, allocation of capital, full disclosures should form the basis to decide investing in a particular stock.'
'A long-term investor with a 4 to 5 year horizon could invest in this theme via SIPs.'
Experts said the rules will help curb market manipulation and money laundering, which could take place during the transfer of shares between residents and NRIs.
Many years during which monsoons were poor saw high returns, while normal or excess rainfall has also coincided with poor calendar year gains.
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