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Foreign investors continued to buy Indian equities in August, marking the sixth consecutive month of such investments. However, the pace of these inflows slowed due to rising U.S. bond yields and a stronger dollar. In August, overseas investors bought stocks worth $1,480 million or Rs 12,262 crore, according to data from the National Securities Depository Ltd. This marks the 10th consecutive fortnight of net buying by foreign investors.
In total, foreign investors have purchased Indian equities worth Rs 1,35,948 crore so far this year, as per NSDL Ltd. data. ICICI Securities noted that the recent increase in U.S. yields, from 3.75% to 4.3%, was triggered by a rating downgrade by Fitch and is affecting foreign portfolio investment (FPI) flows into India.
Despite the slowdown in foreign fund inflows in August, India remains the top destination for FPI flows among emerging markets for the year. In contrast, FPIs were sellers in countries like Thailand, Philippines, Malaysia, and Vietnam, according to data.
Sector-Wise
Flows Metals And Mining Metals and Mining witnesses the largest outflow of $840 million or Rs 6,953 crore in August. Financial Services Financial Services saw the second largest outflow at $784 million or Rs 6,734 crore in August. After witnessing inflows for nine consecutive fortnight, financial Services turned seller in August. In July the sector witnesses an inflow of Rs 11,514 crores.
Fast Moving Consumer Goods
Fast-Moving Consumer Goods sector witnessed the third-largest outflow of $315 million or Rs 2,612 crore in August. In July there was an inflow at $490 million, or Rs 4,070.40 crore. The Nifty FMCG fell by 2.68%, according to data, in the August.
Power
Power witnesses the largest inflow at $1,398 million or Rs 11,563 crore. In July there was an inflow of $369 million or Rs 3,065.26 crore.
Capital Goods
Capital Goods saw the second largest inflow at $1,007 million or Rs 8,336 crore in August. In July there was an inflow of $685 million or Rs 5,690.25 crore.
Information & Technology
Information and Technology witnessed the fourth largest inflow of $495 million, or Rs 4,088 crore. After witnessing an outflow for 10 consecutive fortnights the sector turned buyer in the second half of July. In July it witnessed and inflow of $191 million or Rs 1,586.62 crore. During August, the Nifty IT rose by 2.89%, according to data.
