Foreign portfolio investors bought Indian shares worth Rs 9,017 crore ($1.09 billion) in the first half of December, despite the country's benchmark indexes coming off record high levels on hawkish commentary from global central banks, data showed. The Nifty 50 fell 1.83 percent during December 1-15, according to Refinitiv data.
Between November 16-30, when benchmarks rose to record high levels, foreign fund inflows logged Rs 7,350 crore. Foreign investors have latched on to domestic equities between October 15 and December 15, and are on course to end the year as net buyers for two consecutive months.
This is a pivot from the first six months of 2022, when foreign portfolio investors (FPIs) sold off Indian equities amid geopolitical concerns, a rise in commodity costs and the beginning of rate hike cycles by central banks the world over, before turning buyers for the first time this year in July.
"Foreign investor confidence has returned to India after a volatile start to 2022," said Deven Choksey, Managing Director at KR Choksey Holdings, adding that outflows in the first half of the year were mainly due to the rise in crude oil prices.
Real estate top draw, tech in the cold
While foreigners continued buying stocks, their preferences changed in December. The real estate sector saw the most FPI inflows during December 1-15 at Rs 3,150 crore. Financial services and information technology stocks witnessed outflows of Rs 2,090 crore and Rs 1,314 crore, respectively, according to data from the National Securities Depository.
"The interest in the real estate sector is due to the fact that it is linked more to the domestic economy, which has shown encouraging signs," said G. Chokkalingam, Founder and Head of Research at Equinomics Research and Advisory. The sharp uptick in asset prices in key markets such as Mumbai, helped in attracting foreign fund flows, he added.
On the other hand, outflow in information technology was largely driven by a strong correlation with US and European economies, analysts said. The Dow Jones fell 4 percent, S&P 500 lost 4.52 percent and the tech-heavy NASDAQ shed 5.73 percent in the first half of December. The FTSE also lost 1.94 percent, while the CAC fell 3.2 percent during the same period. There were inflows of Rs 2,676 crore for consumer services stocks and Rs 2,649 crore for shares of fast-moving consumer goods companies.
Stocks vs inflows
