FPIs offload ₹9,784 cr in Indian equities; extend selling streak into October
Foreign portfolio investors (FPIs) continued their selling streak in the second week of October, a trend that started last month, on high US bond yields. FPIs have sold ₹9,784 crore worth of Indian equities and offloaded a total of ₹5,867 crore as of October 13, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL ) data.
The ₹9,784 crore-figure also includes bulk deals and investment in primary market. According to NSDL data, FPIs sold equity for ₹13,652 crore through the stock exchanges till Friday.
‘’They invested ₹3,868 crore through the primary market and others during the same period taking the net sell figure to ₹9,784 crore. The sustained rise in US bond yields was the principal factor driving the FPI selling,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Will Q2 momentum halt FPI/FII selling?
FIIs continued their selling streak in the first week of October after recording a massive outflow from Indian markets last month over global cues. Even though FIIs were net sellers last month, but domestic institutional investors (DIIs) infused a total of ₹19,310 crore in September, that closely countered FII selling and imparted resilience in markets.
Regarding sector specific investments, analysts observed that FPIs continued to sell in financials, power and IT and continued to buy in capital goods and automobiles.
FPIs turned net sellers in the cash market last month because strength in the US dollar index and the US 10-year bond yield remaining high are short-term negatives for FPI capital flows to emerging markets like India, according to analysts. High crude oil prices in the last week of September also weighed on FPIs market behavior.
Will FPIs miss a potential rally in Indian markets?
‘’The Indian market continues to exhibit resilience even in the midst of many challenges and, therefore, there is a growing concern among FPIs that if they continue to sell, they will miss out on the potential rally in the Indian market. This might restrain the FPIs from selling heavily in the coming days,” said Dr. V K Vijayakumar.
However, if the Israel-Hamas conflicts widens and crude shoots up, they might continue to sell. The level of uncertainty is high.”
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Updated: 14 Oct 2023, 04:45 PM IST
