Domestic institutional investors (DIIs) countered foreign portfolio investor (FPI) selling in August, marking their 25th consecutive month of net inflows with purchases totaling ₹94,829 crore ($10.8 billion). This amount is the highest recorded in the past 10 months, as reported on Monday. In contrast, FPIs were net sellers of Indian equities, with net outflows reaching $4 billion in August, the highest in seven months, according to the ‘Market Pulse’ report by the National Stock Exchange of India (NSE). The Indian equity market faced continued sell-offs in August due to aggressive US tariffs and subsequent FPI withdrawals.
The report noted that the fiscal deficit is consolidating and monthly GST collections remain strong, with an increasing focus on long-term growth reflected in rising capital expenditure. Inflation has fallen below the Reserve Bank of India’s (RBI) target, reaching an over eight-year low. The RBI is expected to base its future rate decisions on data. While corporate profitability rebounded in the first quarter of the fiscal year, consensus earnings estimates have been downgraded, although the rate of downgrades has slowed. The energy sector saw upgrades that nearly balanced out declines in other sectors like Consumer Discretionary, Materials, and Financials.
Listed companies, despite being fewer in number than unlisted ones, contribute significantly to corporate tax revenues, which have generally aligned with GDP growth. Although new equity listings increased in August, debt fundraising fell to a 16-month low, and new investor registrations decreased, even as the total registered investor base approached 12 crore.