For FIIs, India still stands at sweet spot for long-term investment horizon

Mumbai : The trend of foreign institutional investors (FIIs) buying stocks through the primary market and others' category and selling through the exchange continued this week. Market experts said on Saturday that India still stands at a sweet spot compelling the foreign fraternity to take a bet for a long-term investment horizon.

According to the National Securities Depository Limited (NSDL) data, FIIs sold equity worth Rs 28,671 crore through the exchanges and bought equity for Rs 12,367 crore via the primary market (till August 23).

FIIs were buyers in telecom and healthcare where the growth and earnings prospects are safe and bright, according to market watchers.

In the first fortnight of August, FIIs were big sellers in financials in the country. Selling was witnessed in many other sectors, including metals on fears that economic slowdown in US and China will keep metal prices soft.

"FIIs were net sellers in metals and mining stocks after the Supreme Court allowed states to levy taxes and royalties on minerals, leading to a rise in operating costs for miners. Auto stocks have performed well in the past few quarters, prompting some profit booking or rebalancing,” said Vipul Bhowar, Director Listed Investments, Waterfield Advisors.

The pharmaceutical sector is bullish due to better-than-expected earnings and a strategic shift towards complex drugs.

The FMCG sector is also attracting investors, driven by a significant recovery in rural consumption, supported by favourable monsoon forecasts and government welfare measures for rural economies, which both should sustain, according to experts.

Market analysts said that amid a global slowdown, geo-political crisis in the middle east and neighbouring countries, India still stands at a sweet spot.

“India’s growth story is largely on the premise that under a stable government regime there would be reforms undertaken which will lead to ease of doing business, a soothing environment for startups, skilling youth and the government’s conviction to place India as a global hub for capital markets,” said Manoj Purohit, Partner and Leader, Financial Services Tax, Tax and Regulatory Services, BDO India.

Given the seamless trading volumes in the capital markets, foreign portfolio investors (FPIs) have kept the momentum upwards, keeping India on the hotspot in both equity and debt segment.