By Bharath Rajeswaran
BENGALURU, – Foreign selling in Indian shares moderated in the first half of June, after election results signalled policy continuity, while buying interest emerged in realty and telecom stocks, official data showed on Friday.
Foreign portfolio investors (FPI) sold 255.86 billion rupees of shares in May and began June similarly ahead of election results on June 4, which saw record outflows, data from the National Securities Depository Ltd (NSDL) showed.
Since then, the outflows have dropped drastically, leading to only 30.64 billion rupees of sales, on a net basis, in the first half of June, compared to 252.8 billion rupees in the same period last month.
“Political clarity, strong growth outlook and likely fear of missing out among FPIs will bring them back to domestic equities,” said Siddharth Vora, head of quant investment strategy & fund manager, PL Asset Management.
“There is simply no option to ignore India, given the size and prospects of the economy and market.”
The realty sector saw foreign buying worth 18.15 billion rupees in the first half of June, the most among all sectors, NSDL data showed.
Financial services recorded FPI inflows worth 10.08 billion rupees, after outflows worth 182 billion rupees over the last two months.
The multi-year investment themes that remain attractive after the election results are capex-linked infrastructure, capital goods and real estate, said Gautam Kalia, senior vice president and head of flagship product – Super Investor at Sharekhan.
Capital-linked banks and financials as well as consumption-linked to discretionary spending are also attractive, Kalia said.
While FPI selling moderated in the first half of June, retail investors and mutual funds latched on to domestic equities, powering the benchmark Nifty 50 index 4.15% higher.
The sectoral data is available on a fortnightly basis. But, daily data shows that FPIs have turned net buyers as of June 20, with inflows amounting to 109.23 billion rupees in the month so far.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio D’Souza)
