InvestorQ : With FIIs turning net buyers in equities in May 2020, is it a signal that markets could recover?
Dilmini Mercia made post

With FIIs turning net buyers in equities in May 2020, is it a signal that markets could recover?

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Dhwani Mehta answered.
4 months ago
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It may still be early to say that as the equity flows are still driven by a handful of block deals. But look at the numbers first. Foreign Portfolio investors (FPIs) remained net sellers for the third month in succession. During the month of May, FPIs infused Rs.14,569 crore in equities but withdrew Rs.21,935 crore in debt resulting in net FPI outflows of Rs.7366 crore. Earlier, FPIs had withdrawn Rs.15,403 crore in April and a whopping Rs.115,000 crore in March. The selling in debt was more due to concerns over falling bond yields as well as worries over the stability of the currency. There has been risk-off selling in EM debt across Asia and India has been no exception. However, the May numbers would have actually been much lower if close to Rs.30,000 crore of FPI money had not come in the form of block deals into stocks like Hindustan Unilever, Bharti Airtel and Kotak Bank. These block deals enabled positive equity flows in May-20. You need to really wait and see if the flows continue outside of the block deal placements. That would be the real test.

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