The behaviour of the foreign institutional investors is gauged from the numbers put out by the exchanges and regulators.
Private equity (PE) activity in India between January and November 2024 recorded a total value of $30.89 billion across 1,022 deals, a 22.7 per cent increase in value and an 18.4 per cent rise in deal count compared to $25.17 billion across 863 deals during the same period in 2023. Notable large deals during the period include Walton Street India Investment Advisors at $1.5 billion, and KiranaKart Technologies at $1.35 billion.
French energy giant TotalEnergies SE on Monday said it will make no new financial contribution as part of its investments in Adani group companies till the Indian firm's founder is cleared of bribery charges. The energy giant said it was not aware of the investigation into the alleged corruption. TotalEnergies is one of the biggest foreign investors in billionaire Gautam Adani's business empire and had previously taken stakes in the group's renewable energy venture Adani Green Energy Ltd (AEGL) and city gas unit Adani Total Gas Ltd (ATGL).
The RBI has changed the way it approached supervision in the past. Having seen a couple of collapses in the NBFC sector and the near-collapse of a few banks, it is focusing on regular drills to prevent a fire from breaking out, explains Tamal Bandyopadhyay.
Foreign investors turned net sellers in October, offloading shares worth Rs 27,142 crore in just the first three days of October due to intensifying conflict between Israel and Iran, a sharp rise in crude oil prices, and improved performance of Chinese markets. The outflow came after FPI investment reached a nine-month high of Rs 57,724 crore in September. Since June, Foreign Portfolio Investors (FPIs) have consistently bought equities after withdrawing Rs 34,252 crore in April-May.
The exodus of foreign investments from Indian equity markets continued unabated, with FPIs pulling out nearly Rs 20,000 crore in the last five trading sessions on higher valuations of domestic stocks and shifting their allocation to China. As a result, foreign portfolio investors (FPIs) have turned net sellers in the equity market, with total outflows reaching Rs 13,401 crore for 2024 so far. Going ahead, the FPI selling trend is likely to continue in the near term till data indicate the piossibility of a trend reversal.
'Volumes in F&O trading had gone up rapidly and, in a way, the increase in STT on F&O will protect investor interest.'
As the coronavirus pandemic is triggering fears of a global recession, foreign investors have started rowing back from the Indian capital markets by withdrawing a massive over Rs 1 lakh crore in March after remaining net buyers for six consecutive months. In order to contain the spread of coronavirus, lockdowns have become a norm the world over and have led the FPIs to adopt a cautious stance, market experts said.
Global financial majors, who until recently viewed India as a safe investment decision, are having second thoughts.
Singh said that a good climate has developed for foreign investors in India.
The Reserve Bank of India's (RBI's) interest rate decision, West Asia conflict and trading activity of foreign investors are the key factors that will dictate investors' sentiment in the market this week, analysts said. Moreover, quarterly earnings from IT bellwether TCS, domestic macroeconomic data and movement in global oil benchmark Brent crude would also guide trends in the market. Worsening tensions in the Middle East and foreign fund outflows were the major culprits behind the equity markets sharp fall last week.
Retail investors have become a force to reckon with in the last 10 years with their ownership of Indian equities rising 800 basis points, or 8 per cent, to 23.4 per cent during this period, suggests a recent note from Morgan Stanley. This number, Morgan Stanley said, is set to rise in the next few years as Indian households are still underinvested in equities. India's demographics, policy framework, investor education and modest positive real rates, it said, will fuel the 'equity cult' in India.
The tax dept has served notices on about 36 foreign investors.
Global trends, trading activity of foreign investors and domestic macroeconomic data announcements would dictate terms in the equity market in a holiday-shortened week ahead, analysts said. Equity markets would remain closed on Wednesday for Gandhi Jayanti. "Looking ahead, it will be interesting to monitor Foreign Institutional Investors (FIIs) and their flow into India.
Equity investors will track the trading activity of foreign investors, global trends and ongoing earnings results for further cues, and benchmark indices may continue to witness consolidation in a holiday-shortened week amid the monthly derivatives expiry, analysts said. Markets fell sharply last week amid massive foreign capital outflows and dismal Q2 earnings so far. Weakness in the markets might continue in the near term amid cautiousness among investors ahead of the US presidential election early next month, an expert said.
Global brokerage firm CLSA has reversed its early tactical shift from Indian equities to Chinese stocks, and has decided to raise India allocation while cutting exposure to China. In its report titled 'Pouncing Tiger, Prevaricating Dragon', CLSA cited challenges facing Chinese markets in the aftermath of Donald Trump's victory in the US elections as the reason for the move. "Misfortune can happen in threes. So it has played out for Chinese equities over the past week.
Three alternative approaches under consideration envisage addressing the flaws of the domestic market, broadening the foreign institutional investor framework and replacing the FII regime with a QFI framework. By reducing the complexity of obtaining permits, foreign investors will be encouraged to us onshore Indian stock market platforms. Individual investors will be allowed to trade on Indian bourses by opening a demat account and a bank account.
FIIs pump in $1.4 billion in March, after pulling out $2.9 billion in Jan-Feb.
In its first bi-monthly policy, the RBI, in order to enhance hedging facilities for foreign investors in debt instruments, proposed to allow them to hedge the coupon receipts falling due during the next 12 months.
Low cost carrier Jagson Airlines, which is to launch operations from May, on Thursday said it has sold about 15.99 per cent stake to a foreign investor and could go in for public issue next year.
However, foreign investors have completely shunned the infrastructure sector.
Last October's circular meant that downstream investment by such funds by way of subscription or acquisition of shares would have been considered "indirect foreign investment" if their investment manager or sponsor is owned or controlled by a non-resident. The finance ministry has now said that mutual funds that invest more than 50 per cent in equity shall be omitted from the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.
Enthused by robust financial performance and attractive valuations, foreign investors increased their exposure to fast-moving consumer goods (FMCG) companies such as Britannia, Hindustan Unilever and Godrej Consumers Products in April-June this year.
Foreign portfolio investors (FPIs) have net sold domestic shares worth over $10 billion so far this month amid a shift to China, which not only offers attractive valuations compared to India but has also announced several measures to support the economy and the stock market in recent weeks. If the trend doesn't reverse, this will be the first time that overseas funds will yank out more than $10 billion from Indian equity markets in a month.
FDI in April, 2007-08 was $1.64 billion which was less than half of the figures in April this fiscal. "I want to dispel fears of any economic slowdown and investment drying up," Commerce and Industry Minister Kamal Nath told reporters in New Delhi on Thursday.
Macroeconomic data announcements, the last batch of Q1 earnings and global trends are the major factors that would influence trading sentiments in the equity market in a holiday-shortened week ahead, analysts said. Besides, trading activity of foreign investors would also be a crucial factor in dictating movement in the market. Equity markets would remain closed on Thursday for Independence Day.
Trumponomics, poor growth, and high valuation certainly don't make a bullish recipe for Indian markets, warns Debashis Basu.
Maharashtra Chief Minister Vilasrao Deshmukh emphasised on Thursday job creation potential of foreign investors operating their plants in the state saying his government was equally concerned with employment aspect just as the volume of investment.
Foreing investors have high hopes from India due to an uptick in the economy
MCX has been struggling to raise funds with a rights issue, ending on Thursday.
Foreign investors have pulled out a massive Rs 22,000 crore from Indian equities so far this month, due to uncertainty surrounding the outcome of the Lok Sabha elections and outperformance of Chinese markets.
With the earnings season drawing to a close, stock markets will take cues from global trends and foreign investors' trading activity this week, analysts said. The US FOMC (Federal Open Market Committee) minutes will be the major highlight this week, experts said. "This week, there are fewer cues on the macro and micro fronts, as the Q1 earnings season has concluded.
Back after roadshows across the globe, Power Minister Sushilkumar Shinde on Thursday exuded confidence that foreign investors will line up for the government's ambitious ultra mega power projects.
The narrative on China is changing post the recent stimulus measures, and it will be hard for global investors to ignore the Chinese markets.
RBI interest rate decision, macroeconomic data and global trends would guide markets' movement this week, analysts said. Besides, trading activity of foreign investors and the last batch of Q1 earnings announcements would also guide trends in equities. HSBC PMI (Purchasing Managers' Index) for the services sector is scheduled to be announced on Monday.
Delay in the recovery in earnings has led Macquarie, Barclays and Ambit to downgrade Indian shares over the last few days.
The outcome of the Union Budget, quarterly earnings from corporates and global trends are the major factors to drive stock market sentiments this week, analysts said. Besides, the trading activity of foreign investors, the rupee-dollar trend and the movement of global oil benchmark Brent crude are also crucial aspects to watch out for.
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