After two weeks of buying, FPIs turned net sellers in Indian equities this week.
So far in 2024, FPI investments have reached Rs 6,770 crore, data from depositories shows.
After two weeks of buying, FPIs turned into net sellers in Indian equities this week, with a net return of Rs 976 crore amid a strengthening US dollar and a sustained rise in US 10-year bond yields, leading capital Cars’ emotions were affected.
Foreign portfolio investors (FPIs) started the week on a positive note, investing Rs 3,126 crore in equities during the first two trading sessions (December 16-20).
However, the trend reversed in the latter half of the week, with FPIs offloading equity worth over Rs 4,102 crore in the subsequent three sessions. This resulted in a total net outflow of Rs 976 crore during the week, data from the National Securities Depository Ltd showed.
Despite this short-term reversal, the broader trend for December remains positive. FPIs have infused Rs 21,789 crore into Indian equities so far this month, reflecting continued confidence in India’s economic growth potential and its resilient markets.
Himanshu Srivastava, associate director of manager research at Morningstar Investment Research India, said FPIs took a cautious approach due to uncertainty about the US Fed meeting and its outcome and future policy direction.
He added that the Fed cut interest rates by 25 bps for the third time this year, signaling future interest rate cuts, dampening investor sentiment and prompting a sell-off in global markets. Activated.
Additionally, factors such as higher valuations, weaker corporate earnings for the September quarter, lower earnings expectations for December, rising inflation, slower GDP growth, and rupee depreciation further weighed on investor confidence. has put
“A rise in the US dollar (dollar index above 108) and a sustained rise in US 10-year bond yields to 4.5 per cent contributed to the selling by FPIs.
“India-specific issues such as reduced growth concerns and corporate earnings in Q2 also contributed to the sell-off by FPIs. The strength of the US economy, good growth in corporate earnings, and a strong dollar are factors that benefit the US,” V. K Vijay Kumar, Chief Investment Strategist, Geojit Financial Services said.
The FPI sell-off has driven down valuations of some large-cap segments, such as banking, making valuations more attractive. Investors can take advantage of this market downturn to invest in quality large caps.
Sectors such as pharma, IT, and digital platform companies are expected to remain resilient and buck the downward trend.
In early November, FPIs had a net outflow of Rs 21,612 crore and a whopping Rs 94,017 crore in October, the worst monthly outflow on record.
Interestingly, September marked a nine-month high for FPI inflows, with a net investment of Rs 57,724 crore, highlighting the volatility in foreign investment trends. what was
So far in 2024, FPI investments have reached Rs 6,770 crore, data from depositories shows.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed. PTI)