Reversing their buying trend, foreign portfolio investors (FPI) turned net sellers in December with a net outflow of Rs 244 crore from the capital markets amid subdued economic data.
According to the depositories data, foreign investors pulled out a net sum of Rs 1,668.8 crore from equities. FPIs, however, invested Rs 1,424.6 crore on a net basis in the debt segment, resulting in a total net outflow of Rs 244.2 crore in December so far.
FPIs had been net buyers for two months to November. They invested Rs 16,037.6 crore in October and Rs 22,871.8 crore in November on a net basis.
Macro-economic data points along with the direction of foreign fund flows and US Fed's monetary policy are expected to influence the Indian equity market's trajectory next week, analysts opined.Additionally, the rupee's movement against the American dollar and the progress of US-China trade deal as well as crude oil price fluctuations will impact investors' risk-taking appetite.
"The major trend which is developing is a rally in the commodity markets, especially metals. The US dollar has begun to see overhead supply, EU economic data is improving. A phase 1 US-China trade deal and dovish US Fed may make this trend more visible," Edelweiss Professional Investor Research's Chief Market Strategist Sahil Kapoor told IANS.
"As suggested earlier, Nifty has entered a consolidation phase which played out last week. It now seems that fresh upmove may begin as we enter deeper into December month."
In terms of macro-data, investors will look forward to the release of industrial production, retail and wholesale inflation figures next week.
"FPIs adopted a cautious approach while investing in Indian equities, on the back of subdued economic indicators. It has not been a good year for the Indian economy so far and the recently released GDP number which continued the southward march for the seventh quarter in a row falling to 4.5 per cent reaffirmed the slowdown in the Indian economy," said Himanshu Srivastava, senior analyst manager research, Morningstar Investment Adviser India.
FPIs would continue to be watchful of the domestic environment and tread cautiously, he added.
Echoing the views, Harsh Jain, co-founder and COO Groww said, "Trump threatening to continue the US-China trade war well past 2020 is definitely making global investors cautious. The repo rate was not reduced, unlike FPIs' expectations. Plus the latest GDP numbers are also responsible for bearish behaviour of FPIs.
Meanwhile,five of the 10 most valued firms added a total ₹56,877.12 crore in market valuation last week, led by IT major Tata Consultancy Services (TCS).
The market capitalisation (m-cap) of TCS jumped ₹26,360.5 crore to ₹7,96,612.51 crore at close on Friday.
Reliance Industries Limited (RIL), ICICI Bank, Kotak Mahindra Bank and Infosys were among the gainers. HDFC Bank, HUL, HDFC, ITC and State Bank of India (SBI) suffered losses in their m-cap in the week ended on Friday.