The major trend in foreign portfolio flows in October, so far, has been the sustained selling by FPIs. This trend of FII selling and DII buying is likely to sustain in the near-term, the analysts added
Mumbai: Foreign investors turned net sellers in October, withdrawing shares worth Rs 58,711 crore in the month so far owing to escalating conflict between Israel and Iran, a sharp rise in crude oil prices, and the strong performance of the Chinese market.
According to the data, FPIs made a net withdrawal of Rs 58,711 crore from equities between October 1 and 11.
The outflow came following a nine-month high investment of Rs 57,724 crore in September.
Since June, Foreign Portfolio Investors (FPIs) have consistently bought equities, after withdrawing Rs 34,252 crore in April-May. Overall, FPIs have been net buyers in 2024, except for January, April, and May, data with the depositories showed.
So far this year, FPIs invested Rs 41,899 crore in equities and Rs 1.09 lakh crore in the debt market.
However, massive selling on October didn’t have a serious impact on the market, market experts said on Saturday.
According to them, the entire FPI selling has been absorbed by the domestic institutional investors (DIIs) who are receiving sustained fund inflows.
The major trend in foreign portfolio flows in October, so far, has been the sustained selling by FPIs. This trend of FII selling and DII buying is likely to sustain in the near-term, the analysts added.
FPIs have been investing in Chinese stocks which are cheap even now.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, told PTI that FPIs have been following a strategy of ‘Sell India, Buy China’ after the Chinese authorities announced monetary and fiscal measures to stimulate the slowing Chinese economy. FPI money has been moving to Chinese stocks, which are cheap even now.
Together, these developments have created a temporary barrier in Indian equities, reflected in FPI outflow in both debt and equity segments.
In the debt markets, FPIs pulled out Rs 1,635 crore through the General Limit and invested Rs 952 crore via Voluntary Retention Route (VRR) during the period under review.
Since June, Foreign Portfolio Investors (FPIs) have consistently bought equities, after withdrawing Rs 34,252 crore in April-May. Overall, FPIs have been net buyers in 2024, except for January, April, and May, data with the depositories showed.
However, “India has much better growth prospects now compared to China and, therefore, India deserves premium valuations”, said market watchers.
Sector-wise, it was a mixed bag for Indians tock market, with buying seeing in pharma, metals and IT. Result season started with IT major TCS announcing in-line numbers.
Now all eyes will be on Infosys results next week and management commentary on revenue growth guidance. Other prominent companies that will announce their earnings include HDFC Life, Axis Bank, Wipro and LTIMindtree.
“Thus, heavyweights are likely to be in focus. After the sharp fall last week, Nifty consolidated and traded sideways amid relentless selling by FIIs and the absence of any major triggers. Overall we expect markets to consolidate at higher zones and take cues from global factors and result season,” said Siddhartha Khemka, Head-Research, Wealth Management, Motilal Oswal Financial Services.
On another note, India mourned the loss of business icon Ratan Tata, who passed away at the age of 86.
During his tenure, the Tata Group saw an extraordinary transformation, with profits surging 51 times and market capitalisation growing 33 times to over Rs 33,17,385 crore.