FPIs turn net buyers: Foreign Portfolio Investors (FPIs) turned net buyers of Indian stocks in February, injecting a total of Rs 1,539 crore into the market, with a focus on auto and pharma sectors, as per data from the National Securities Depository Ltd (NSDL).

The surge in investment was bolstered by a weightage increase in a key MSCI index, contributing to positive market sentiment.

Amid modest performance in January marked by foreign outflows, the benchmark indexes Nifty 50 and BSE Sensex witnessed over one per cent gain last month, driven by FPI buying and robust domestic inflows.

Analysts expect a continued uptick in FPI inflows, especially with India's growing share in the MSCI Emerging Markets index. Following the latest revision, India has significantly closed the gap with China in MSCI's Global Standard index, resulting in a record weightage of 18.2 per cent effective from the end of February.

Projections suggest that India could potentially receive up to $1.2 billion in passive foreign flows post the MSCI February review, according to insights from Nuvama Alternative and Quantitative Research.

March has already witnessed significant FPI activity, with investments totalling Rs 6,360 crore, particularly driven by positive data reflecting faster-than-expected economic growth in the October-December quarter.

Sector-wise, auto and pharma stocks attracted notable FPI interest, while foreign selling persisted in the financials segment. FPIs have divested financial services shares worth approximately Rs 40,000 crore in the initial two months of 2024, consequently triggering a 5 per cent decline in the financials index during the same period.

(With Reuters inputs)