InvestorQ : Why is FPI buying back in the markets now? I see that May numbers are positive?
Ria Jain made post

Why is FPI buying back in the markets now? I see that May numbers are positive?

Answer
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Anu Biswas answered.
4 months ago


Numbers may look positive but you must take that with a pinch of sale. Here is why. Foreign portfolio investors (FPIs) invested Rs.17,363 crore in equity markets in the month of May 2020 but most of these inflows were driven by the block deal on HUL; when Glaxo sold the block to a clutch of FPIs. One thing to note is that trend may have changed to risk-off after the Fed warned of the US recession lasting longer and deeper than originally anticipated. FPIs also withdrew Rs.18,355 crore from debt resulting in a net outflow of Rs.992 crore in the first 3 weeks of May. Actually, if you remove the Rs.25,000 crore HUL block deal, FIIs would have been net sellers in equity. That is why you must take that data with a pinch of salt.