In the month of April so far, foreign portfolio investors (FPIs) were net sellers of Indian equity to the tune of Rs 6,822 crore. However, the quantum of outflow has reduced compared to March, when FPIs pulled out over Rs 60,000 crore from Indian equity.
Interestingly, data also suggest that we have seen a quantum of buying increased by FPIs in the initial days of April barring the first two days. They remained net buyers for four days out of the first seven trading days.
FPI trend shows that the first half of April was comparatively better than the latter part of the month where FPIs were net seller on four out of six trading days.
"The sharp drop in the quantum of net flows could be attributed to India gaining prominence among foreign investors for doing well with regards to containing the COVID-19 pandemic from spreading aggressively," said Himanshu Srivastava, senior analyst manager research, Morningstar India.
In addition to that, measures announced by the government and the RBI periodically to revitalize the sagging the economy would also be resonating well with investors, he added.However, he cautioned that the sentiment continues to be negatively tilted and FPIs would largely adopt a wait-and-watch approach with more focus on taking short-term tactical bets.