FPIs make a beeline for India in September on hopes of Fed rate cut

Data from NSDL shows that during the current month till September 17, FPIs pumped net $ 3,682 million (Rs 30,908.1 crore) in Indian equities, higher than the net monthly flow in six out of eight previous months in the current calendar year.

In addition, on September 13, FPIs invested $ 949 million, the second highest single day net investment in the local equity market in 2024 so far after $ 1,731 million on August 30.

Agencies

The upbeat buying by FPIs in September has turned their net secondary market equity inflow in 2024 so far at $ 1,450 million from an outflow of $ 1,417 million at the end of August. At the current pace, September holds the potential to surpass the current year’s highest monthly net investment of $ 4,241 seen in March though a lot will depend upon the Fed’s stance on Wednesday.In addition, FPIs have increased net investments in the secondary market in September unlike in previous months where they were more focussed on the primary market which includes IPOs and qualified institutional buying (QIB).

In September so far, they have invested $ 2,867 million in the secondary market and $ 815 million in the primary market. In 2024 till August, FPIs have shown more interest in the country’s primary market issuance, investing $6,580.8 million while being net sellers of $ 1,417 million worth of equities in the secondary market.
“A significant trend in the market for the week ended 13th September is that FIIs were buyers of equity in the cash market on all days of the week,” said VK Vijayakumar, chief investment strategist, Geojit Financial Services in a note adding that resilience in the Indian market and a rate cut possibility in the US were key reasons for the upbeat activity of foreign investors.

In contrast to the euphoria shown by FPIs, domestic funds seem to be going slow in September. According to the data from SEBI, net investment by local funds in equities till September 11was Rs 8,951 crore compared with Rs 17,570 crore in the comparable period of the previous month.