Even as FPI selloff continues, these Indian stocks find favour

Foreign investors continue to sell Indian stock markets as they pulled out over ₹9,600 crore in February so far, which comes after a net withdrawal of ₹28,852 crore by Foreign Portfolio Investors (FPIs) in January 2023. Even amid the selloff, FPIs are betting on autos, metals and construction stocks, as per analysts.

“After massive selling in the cash market in January, FIIs slowed down their selling in February and turned buyers for ₹1,458 crore on 10th February. It appears that the FPI strategy of shorting India and going long in cheaper markets like China, Hong Kong and South Korea is grinding to an end. CDSL data shows aggregate FPI selling of ₹38,523 crore in 2023 till date. The selling in the cash market is much higher at ₹59,298 crore,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Foreign institutional investors (FIIs) have been buyers in autos and auto accessories, construction and metals and mining, highlighted Vijayakumar. “They have been consistent sellers in financial services. In IT, selling in early January has changed to buying in late January and early February. It appears that the sustained FPI selling is slowly coming to an end.”

So far this month, FPI flows were mixed for emerging markets. India, Thailand and the Philippines witnessed outflows, while South Korea, Taiwan, and Indonesia attracted foreign investment, as per a PTI report.

“Foreign participants have been heavily shorting Indian markets only to enter later at further lucrative valuations. On the sectoral allocation, they are aligning themselves with the market cycles and moving into infrastructure, commodities and the automotive sector. Further on, we would later see them allocate towards chemicals, pharma and textiles that has been heavily beaten down since a year,” said Sreeram Ramdas – Vice President at Green Portfolio, SEBI Registered Portfolio Management Service Provider.

Reference Link:- https://www.livemint.com/market/stock-market-news/foreign-investors-buying-these-indian-stocks-even-as-fpi-selloff-continues-11676279707630.html
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