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India Today
07-05-2025
- Business
- India Today
Explained: Why foreign portfolio investors are buying Indian financial stocks
Foreign portfolio investors (FPIs) turned strong buyers of Indian financial stocks in April, marking a sharp reversal in sentiment after months of caution. Data from the National Securities Depository shows FPIs bought Rs 18,409 crore ($2.18 billion) worth of shares in the sector last month, propelling the Nifty Financial Services index to a 4.1% gain. The second half of April alone saw $2.71 billion in FPI inflows—the highest-ever for a fortnight, and the third-highest monthly inflow on record for the financial sector. This influx helped foreign investors post their first net buying month in 2025, sending the benchmark Nifty 50 index up 3.5%. Bajaj Broking attributed the buying spree to easing global trade tensions, hopes of a US–India trade agreement, and attractive valuations in Indian equities. The US government's move to pause reciprocal tariffs on April 9 and signals of an imminent bilateral trade deal also lifted sentiment. Strong quarterly results from India's top private lenders—HDFC Bank and ICICI Bank—further boosted FPI interest, according to analysts. The financial sector's robust earnings stood in contrast to the information technology space, which saw outflows of $1.8 billion as global demand concerns deepened. Telecom and consumer stocks also attracted foreign interest in April, but most other sectors witnessed outflows. Ambit Capital warned that policy uncertainty due to US tariffs, combined with slowing growth in the US, UK, and EU, could weigh on IT margins and demand through FY2026.
Reuters
04-04-2025
- Business
- Reuters
Foreign investors fuel surge in Indian financials in March; outflows persist for fiscal 2025
April 4 (Reuters) - Foreign portfolio investors (FPIs) ramped up purchases of India's financial stocks in the second half of March, marking the highest fortnightly inflows into the sector in 15 months, data from the National Securities Depository showed on Friday. FPIs invested 175.85 billion rupees ($2.06 billion) in financials, accounting for two-thirds of the total $3.05 billion worth of inflows during the period. The benchmark Nifty 50 (.NSEI), opens new tab also snapped its longest losing streak in 29 years. Analysts attributed the buying in financials to attractive valuations, potential rate cuts, and a liquidity injection by the central bank. Additionally, a regulatory approval that doubled the investment threshold for FPIs to 500 billion rupees ($5.86 billion) prompted a sharp spike in inflows in the last week of March. "The decision is encouraging for the FPI community and will hopefully bring back much-needed volume in trades and liquidity in the market," said Manoj Purohit, partner and leader of financial services tax at BDO India. OUTFLOWS PERSIST However, despite the inflows in March, outflows from Indian stocks still came out on top for the fiscal year ended March 31. Net foreign outflows for the year were the second-highest on record, reaching $12.7 billion as FPIs who were net buyers in the first half of the fiscal, turned net sellers in the second half. They offloaded domestic shares worth $29 billion in the October-March period on the back of slowing earnings growth and elevated valuations relative to other emerging markets. By the end of fiscal 2025, the Nifty 50 had fallen about 10.5% from its late-September peak and its 12-month forward price-to-earnings ratio was trading at a 3% discount to its 10-year average of 20.6x. Banks and non-bank lenders were also trading well below their long-term averages. The late-March buying offered short-term relief to markets in March, but risks still remain, say analysts. "FPIs could reduce exposure to emerging markets as risk aversion rises," said Devarsh Vakil, head of prime research at HDFC Securities, citing global trade disruptions and U.S. reciprocal tax policies. ($1 = 85.2740 Indian rupees)
Reuters
10-02-2025
- Business
- Reuters
India's benchmark indexes set for muted start as tariff concerns loom
Feb 10 (Reuters) - India's equity benchmarks are expected to open flat on Monday, as global trade concerns weighed on risk sentiment following U.S. President Donald Trump's decision to impose reciprocal tariffs on several countries this week. The Gift Nifty futures were trading at 23,560.5, as of 08:09 a.m. IST, indicating that the benchmark Nifty 50 (.NSEI), opens new tab will open near Friday's close of 23,559.95. Other Asian markets inched lower, with the MSCI Asia ex-Japan index (.MIAPJ0000PUS), opens new tab shedding 0.2%. The U.S. dollar strengthened, while Wall Street equities closed lower on Friday as rising global trade tensions and weak economic data left investors rattled. Trump said on Friday he plans to announce reciprocal tariffs on many countries by Monday or Tuesday of next week, a major escalation of his offensive to tear up and reshape global trade relationships in the U.S.' favor. The imposition of reciprocal tax would fulfill Trump's campaign promise to impose tariffs on American imports equal to rates that trading partners impose on American exports. Indian Prime Minister Narendra Modi is preparing additional tariff cuts ahead of his meeting with Trump to boost U.S. exports to India and avoid a potential trade war, according to a Reuters report. Modi will visit Washington on Wednesday for talks with Trump. The U.S. President also repeated warnings of imminent tariffs, including on steel and aluminium imports, an inflationary move that could limit the scope for rate cuts. Higher rates in the U.S. make investments in emerging markets such as India less attractive for foreign investors. Foreign portfolio investors have offloaded Indian shares worth about $9.9 billion on a net basis in 2025 so far, according to the National Securities Depository, opens new tab. The rupee, which logged its worst weekly decline since December 2022, is likely to remain under pressure this week due to the risks of trade tariffs, ahead of crucial U.S. inflation data. STOCKS TO WATCH ** Life Insurance Corp of India ( opens new tab posts quarterly profit rise, sees recovery in premiums from the fourth quarter ** Oil India's ( opens new tab quarterly profit misses estimates as low prices outweigh demand ** Nifty 50 constituents Eicher Motors ( opens new tab and Grasim Industries ( opens new tab will be in focus ahead of their quarterly earnings ($1 = 87.6270 Indian rupees)
