NEW DELHI: Foreign Portfolio Investors (FPIs) displayed negative investment patterns in the stock market during the initial week of June. FPIs withdrew a total of Rs 8,749 crore from equities between June 2 and June 6, according to NSDL data. This shows that FPIs remained net sellers in the stock market for most of the week. The outflow occurred during a period of global uncertainty and investor caution.A sharp shift was seen on Friday after the Reserve Bank of India’s Monetary Policy Committee unexpectedly cut the repo rate by 50 basis points. The repo rate decreased to 5.5%, strengthening investor confidence.Financial analysts suggest that this substantial rate reduction will enhance India’s economic performance and strengthen demand conditions. “June first week saw a roller coaster in terms of FPI flows. The trend is positive as a weak US dollar is inversely correlated to EM flows,” Banking and Market expert Ajay Bagga told ANI.“With Indian macro showing strength and expectations of the 100 bps rate cuts providing a further boost to economic momentum and aggregate demand, FPIs will rank India as a top investment destination. Valuations are quoted as a constraint but we see the growth potential overriding these concerns eventually,” Bagga added.Despite concerns about elevated stock market valuations, analysts indicate that India’s robust growth outlook could help address this issue. May recorded positive net foreign portfolio investment (FPI) inflows of Rs 19,860 crore, establishing it as the strongest month for foreign investment so far this year. In contrast, FPIs had sold equities worth Rs 3,973 crore in March, while January and February saw even higher outflows of Rs 78,027 crore and Rs 34,574 crore, respectively.
