Foreign Portfolio Investors (FPIs) sold shares worth about $14 billion in the Indian stock market in October and November. However, after this they became net buyers in December 2024. Last month, foreign investors have invested $1.83 billion in the market. In December, foreign investors increased the purchase of shares in the IT sector, but reduced their stake in the oil and gas sector. According to data collected from NSDL, he sold oil and gas stocks worth $1.3 billion. Apart from this, FIIs also increased their stake in other sectors like real estate, healthcare and capital goods.
FPI bought IT shares worth $1.1 billion
This month, FPIs have bought IT shares worth $1.1 billion, followed by realty ($562 million) and healthcare ($442 million). According to the data, foreign investors invested $368 million each in capital goods and financial services stocks. Talking about selling, he has sold shares worth $513 million in automobile and $327 million in consumer staples sector.
Interestingly, there has been buying in IT stocks just before the announcement of December quarter results. FIIs have the second largest investment in the IT sector, followed by Financial Services. Both sectors account for 40 percent of their net investment in India.
FIIs have sold heavily in the Indian market in 2024, due to slow profit growth and high valuations. According to Bloomberg data, Nifty50 is trading at a valuation of 19.4 times one year forward earnings, while Korea’s market is at 8.6 times and Taiwan’s TAIEX index is at 16 times. At the same time, the valuation of Chinese CSI 300 index is at 12.3 times.
Experts’ opinion
Ridham Desai, MD, Morgan Stanley India, believes earnings growth in the December quarter will be in the mid-single digits due to weak top-line growth. Desai said, “We believe that the earnings upcycle is in the right direction and there remains a possibility of outperforming consensus estimates.” Morgan Stanley placed bets on large private banks, selected consumer and industrial stocks and IT services stocks ahead of the upcoming earnings season.
TCS shares rose 6%
Shares of Tata Consultancy Services (TCS) rose nearly 6% in Friday trade. The IT company showed optimism regarding the increase in discretionary spending by customers. Although December quarter results fell short of analysts’ expectations, the company’s positive comments boosted investor confidence. The Nifty IT index rose 3.4 per cent on Friday, the biggest single-day gain in two months. Assets under custody (AUC) of FIIs are expected to reach $831 billion by the end of December 2024, which is 16 per cent of the country’s total equity market.
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