Foreign investors back in Indian equities, infuse Rs3,695 crore

After a continuous sell-off in the past three months or so, foreign portfolio investors (FPI) have turned net buyers in the first week of January in the Indian equity segment, data showed.

So far in 2022, FPIs have infused Rs3,695 crore in the Indian equity.

The recent correction in domestic equity markets provided them a good buying opportunity, analysts opined.

“This buying by FPIs comes at a time when the market has recovered after a fall of almost 12 per cent from the high of 18,604 to a low of 16,410. FIIs seem to be more comfortable buying now with the start of the new rally post the correction ahead of the Q3 earnings,” said Jayesh Bhanushali, AVP, Research at IIFL Securities.

“Also, with the run-up to the budget, we expect the FII buying trend to continue and the market to have a positive bias in the short term.”

During October-December period, foreign investors made a net outflow of Rs 38,521 crore from the Indian markets.

“Anecdotally, FIIs remain sellers in the last month of the calendar year and they start to buy again from the 2nd or 3rd week of January. Union budget and State elections along with Central banks’ policies will also play an important role in the directions of FIIs’ flows however I am optimistic about the market outlook and their stance,” said Parth Nyati, Founder of Tradingo.

Indian equities: Expecting a healthy Q3FY22 earnings for companies, Indian equities traded in the green and settled positive on Monday.

Accordingly, the Sensex and Nifty settled at 60,395 points and 18,003 points, up 1.09 per cent and 1.07 per cent from their previous close, respectively.

“Amid weak global markets and rising Covid cases, the domestic market displayed strong momentum on expectations of a healthy start to the earnings season. PSU Banks led the sectorial rally as reports suggested an increase in FPI limits while the realty sector followed the trend on robust sales numbers and expectations of support measures in the upcoming budget,” said Vinod Nair, Head Of Research at Geojit Financial Services.

Latest data shows FPIs have infused Rs 3,695 crore in equity segment so far in January 2022.

All sectoral indices rallied during Monday’s session, NSE data showed.

Amongst the stocks, UPL, Hero Motocorp, Titan, SBI, and Maruti Suzuki India jumped the most, rising 4.6 per cent, 3.3 per cent, 3.1 per cent, 2.8 per cent, and 2.7 per cent, respectively.

On the other hand, Wipro, Nestle India, Divi’s Labs, Asian Paint, Power Grid Corporation stocks tanked the most.

Besides, One97 Communications-backed Paytm’s shares fell nearly six per cent during the day as global brokerage house Macquarie lowered target price for the stock.

“Markets have gained momentum in the past few days on the back of low impact of Omicron variant leading to less stringent restrictions or lock down by various government authorities. This has raised hope of economic recovery along with expectation of strong corporate earnings,” said Siddhartha Khemka, Head - Retail Research at Motilal Oswal Financial Services.

“After two strong quarters of earnings growth, we expect Nifty to register another healthy quarter of 22 per cent YoY growth in 3QFY22. The growth will be driven by four sectors - Metals, BFSI, oil & gas and IT.”

Some penny stocks or low-priced stocks have given massive returns in the past 18 months with 102 stocks rising over 1000 per cent and 10 stocks rising over 5000 per cent.

The misfeasance is now widespread and IANS has been throwing into stark relief how circular trading and pump and dump schemes are being run brazenly. It is high time that SEBI and the two exchanges start looking at the data and improve their surveillance mechanisms.

As per data by BP Wealth, Equipp Social Impact Technologies rose by a whopping 29385 per cent, Simplex Papers by 14479 per cent, TTI Enterprise by 13335 per cent, HCP Plastene Bulkpack by 9620 per cent. These were among the top performing penny stocks in the last 18 months.

As per data by BP Wealth, among the other top gainers in the last 18 months, Digjam Limited gave returns of 7197 per cent, GRM Overseas at 6469 per cent, Tata Teleservices at 6448 per cent, Cosmo Ferrites at 6130 per cent, Banas Finance at 6021 per cent, B&A Packaging at 5013 per cent, ARC Finance at 4942 per cent, Adinath Textiles at 4764 per cent, SEL Manufacturing Company at 4720 per cent, Waaree Renewable Technologies at 4227 per cent, Automotive Stampings and Assemblies at 3891 per cent, Rohit Ferro-Tech at 3867 per cent, Raghuvir Synthetics at 3827 per cent, Ashiana Agro Industries at 3757 per cent, Indian Infotech and Software at 3689 per cent and Pan India Corporation at 3569 per cent.

Swapnil Shah, Head of Research, BP Wealth, said that investors in penny stocks have garnered huge returns after the Covid-induced market crash in March 2020.

Indo-Asian News Service