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FPI investment is showing a positive trend. FPIs were continuous buyers during the last 6 trading days having invested Rs Rs 4738 crores. The basic reason for the change in FPI stance is the declining dollar index and falling bond yields in the US. Also the rupee has been appreciating in recent days from around Rs 82.75 to 81.74 now. This trend is likely to gather momentum. FPIs have turned buyers in automobiles, financial services, capital goods, power and metals and mining. They have been selling in IT. The phase of sustained FPI selling appears to be over. Also, Indian valuations have turned reasonable now. The Q4 results season starting April 14th will influence FPI inflows. More money is likely to flow into financials, capital goods and autos and auto components.

Since FPI started in 1993, this is the first time FPIs sold consecutively for two financial years. They sold equity worth Rs 140010 crores in FY 22 and Rs 37632 crores in FY 23. This is likely to reverse in FY24 since India has the best growth potential in FY24. Even though Indian valuations are relatively expensive, they have turned reasonable now and in tune with the long-term premium enjoyed by India.