After witnessing an outflow of Rs 34,146 crore from equity in January and February, FPI investment turned positive, aided by the bulk investment of Rs 15,446 crore by GQG Partners in four Adani group stocks.

However, as there was a net outflow of Rs 8,367 crore from the debt market in March, the net inflow during the month was at Rs 6,357 crore so far, according to data available from NSDL. The net outflow from debt and equity markets in 2023 was at Rs 24,326 crore, according to NSDL.

After excluding the GQG investment, FPIs continued to sell in India in March even though the intensity of selling has subsided. “An important feature of FPI activity is that there is no consistency in FPI activity. For instance, FPIs were buyers in the first half of February in financial services and sellers in the second half,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Similarly, they were buyers in IT in the first half and sellers in second half. In oil and gas, they were sellers in the first half and buyers in the second half. “All data relates to February. This shows that their activity was not in response to the performance or prospects of these sectors. A consistent trend is FPIs have been buyers in capital goods stocks. This explains the strength in the capital goods segment even in a weak market,” Vijayakumar said.

The collapse of the SVB Bank in the US has impacted the sentiment in the market. FPIs are likely to be cautious in their approach in the coming days, said an analyst. The sell-off in US markets late last week was triggered by a crash of 60% in SVB which mainly funds start-ups. “This impacted sentiments and banking stocks took a beating on concerns that rising interest rates might trigger loan repayment defaults. This is a US-specific issue and will not have an impact on Indian banking stocks. But the sentiment impact can be negative,” said an analyst.