March will be the first time in 6 months when FIIs will be net buyers. Though the final amount is significantly small despite the Rs 33,183 crore pumped in this month, the book of records will show a green tick for the month. Thanks to the FII buying seen in the last week, they have turned net buyer of equities worth Rs 2014.18 crore in the final month of FY25. However, analysts put out a word of cation and reiterate that it is not time to celebrate yet and there is no definitive indication of a trend reversal.
Shrikant Chouhan, Head Equity Research, Kotak Securities highlighted that, “FPI flows are expected to remain volatile. India outperformed global markets over the past week, as volatility continued to reign in global markets over possible forthcoming US tariffs. Indian markets continued to witness positive sentiment, especially from foreign investors. Meanwhile, the rupee appreciated 0.6% against the dollar over the past week.”
Four key factors to watch before a definitive reversal in FII action
Foreign investor flows till March 27 indicate that they were negative for all key emerging markets except India, Brazil, the Philippines, and South Korea. In fact, markets like Indonesia, Malaysia, Taiwan, Thailand, and Vietnam recorded significant outflows as well. There are many factors dictating the FII trend at the moment but clarity on Trump tariff is the biggest concern of all-
ALSO READFII buying spree: 3 factors fuelling March surge Clarity on Trump Tariff
The uncertianty with regards to Trump Tariff continues. After hiting at possibilities of some relaxation, the US President Donald Trump has again reiterated that he will unveil a massive tariff plan on Wednesday, which he has dubbed “Liberation Day.” According to Trump, “You’d start with all countries. Essentially all of the countries that we’re talking about.” The US has already imposed tariffs on aluminum, steel and autos. Along with this, there is now increased tariffs on all goods from China.
This analysts say will play a key role in determining the future allocation trend. According to market expert, Ajay Bagga, “On the global front , the picture is muddled by the organised chaos that is the Trump 2.0 policy. The tariff implementation post April 2 is being watched by all governments , businesses and investors as it will have a deep impact on geo-economics and supply chains.”
Dr.
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