FPIs invest around ₹3,350cr in Indian market this week
What's the story
Foreign Portfolio Investors (FPIs) have pumped ₹3,346.94 crore into the Indian stock market this week. The inflow was mostly driven by positive sentiment after the Reserve Bank of India (RBI) announced a rate cut. However, geopolitical tensions between Israel and Iran affected investor sentiment toward the end of the week.
Rate impact
Rate cut announcement boosts investor confidence
The RBI's Monetary Policy Committee (MPC) announced a surprise rate cut of 50 basis points on June 6. The repo rate was reduced to 5.5%, which significantly boosted investor confidence. This was reflected in the strong FPI inflows during the week, particularly on June 9, 10, as well as 11.
Market volatility
Overall trend for June remains negative
Despite the positive inflows, the overall FPI investment trend for this month remains negative. So far, FPIs have withdrawn around ₹5,402 crore from Indian equity markets in June. This is amid ongoing geopolitical tensions such as the Israel-Iran conflict and renewed tariff threats that have also dampened investor sentiment in the latter half of this week.
Investor behavior
Week sees strong reversal in FPI activity
This week witnessed dramatic swings in FPI activity. After a positive start on June 9 with net inflows of $223.78 million, the momentum went on the following day ($136.96 million) and June 11 ($289.24 million). However, it turned negative with outflows of $493.25 million on June 12 and $374.95 million on June 13, indicating a volatile investor behavior amid changing market conditions.