”Future of FPI flows is expected to remain volatile given key events such as upcoming state elections, expectation of rise in interest rates and concerns a new Covid variant will prompt fresh mobility restrictions, hindering economic recovery,” said Shrikant Chouhan, Head – Equity Research (Retail)
Foreign portfolio investors (FPI) have pumped in a net sum of Rs 5,319 crore in Indian capital markets despite a massive correction seen in equities over the last fortnight.
In October, they were net sellers to the tune of Rs 12,437 crore.
As per depositories data, overseas investors put in a net Rs 1,400 crore into equities and Rs 3,919 crore into the debt segment between November 1-26.
This translated into total net investment of Rs 5,319 crore.
”Since FPIs have been holding large quantity of banking stocks, they have been major sellers in this segment. Sustained selling has made banking stocks attractive from the valuation perspective,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
He further noted that sharp correction in the market on 26th November has been mainly triggered by concerns arising out of the new strain of the virus spotted in South Africa, Botswana and Hong Kong.
”Despite recent correction, the markets continue to be at elevated levels and hence FPIs would have booked profits,” said Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.
Trend reversal on a weekly basis has become a norm with respect to FPI flows in the Indian debt markets, he added.
FPIs would be closely watching the spread of the new coronavirus variant and its possible impact on the growth globally.
Higher valuation is also a concern which may continue to trigger profit booking at regular intervals, he said.
”Future of FPI flows is expected to remain volatile given key events such as upcoming state elections, expectation of rise in interest rates and concerns a new Covid variant will prompt fresh mobility restrictions, hindering economic recovery,” said Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities.
Stock markets this week will be driven mostly by updates related to the new coronavirus variant that sent equities tumbling globally on Friday, macroeconomic data announcements and auto sales numbers, analysts said.
A World Health Organisation panel has named the new COVID strain ‘Omicron’ and classified it as a highly transmissible variant of concern, the same category that includes the Delta variant.
The potentially more contagious Omicron was first reported to the WHO from South Africa on November 24, and has also been identified in Botswana, Belgium, Hong Kong and Israel. Many countries have introduced travel bans and restrictions on southern African countries in an effort to contain Omicron’s spread.
“New COVID variant, FIIs’ behaviour along with macro numbers will be key factors to drive the market this week. COVID related developments will remain key triggers for the market where the market will remain keenly interested to know the efficacy ratios of various vaccines against a new variant of COVID whereas restrictions-related news across the globe will also cause volatility,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
The Sensex nosedived 1,688 points on Friday amid concerns over the new coronavirus variant that also led to rout in global markets.
Yesha Shah, Head of Equity Research, Samco Securities, said, “Post Q2 result season, Dalal Street will look towards macros for hints to move the needle in broader markets. Inflation being a key factor will be at the centre of all news in the next two weeks since the RBI MPC meet is scheduled in December. November monthly auto sales number can be a trigger to drive some movement this week.” Among macroeconomic data, PMI numbers for manufacturing and services sectors would also be tracked.
“Equity markets in the near term will closely follow the impact of new COVID variant, inflation data, and Central Bank policies,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.
During the last week, the BSE benchmark plunged 2,528.86 points or 4.24 per cent.