foreign investors
Last week there was the biggest sell-off in the stock market after 2022. Foreign investors were the reason for this huge decline in the market. In fact, after being buyers for two consecutive weeks, foreign portfolio investors (FPIs) pulled out Rs 976 crore from Indian stock markets last week. A stronger US dollar and rising yields on US 10-year bonds weighed on investor sentiment. According to data from National Securities Depository Ltd., foreign portfolio investors started the week on a positive note. They invested Rs 3,126 crore in shares during the first two trading sessions (December 16-20). However, there was a change in his stance later and he withdrew more than Rs 4,102 crore in three sessions. Thus during the week they made a net withdrawal of Rs 976 crore. However, despite this, the FPI trend remained positive in December and they pumped in Rs 21,789 crore into the Indian stock market during the month.
Due to this increased uncertainty in the market
Himanshu Srivastava, associate director, manager research, Morningstar Investment Research India, said FPIs are adopting a cautious approach amid uncertainty over the outcome of the US central bank Federal Reserve meeting and future policy review. He said the Federal Reserve has cut the interest rate by 0.25 percent for the third time this year, but it has indicated less rate cuts in the future, which affected investor sentiment and triggered a selloff in the global market. He said that apart from this, high valuations, weak September quarter results of companies, estimates of weak December results, slow pace of Gross Domestic Product (GDP) growth and decline in rupee have weakened the confidence of foreign investors.
For this reason FPIs are selling
VK Vijayakumar, chief investment strategist, Geojit Financial Services, said that FPIs are selling due to the strengthening of the dollar index and rising yields on 10-year bonds. He said that India-related issues such as concerns over growth and companies’ second quarter results not being as per expectations have also affected the sentiment of FPIs. Earlier in November, FPIs had made huge withdrawal of Rs 21,612 crore and in October, Rs 94,017 crore. Interestingly, in September, FPIs had made a net investment of Rs 57,724 crore in the Indian stock markets, which is a nine-month high. Depository data shows that FPI investment in Indian stock markets so far in 2024 has been Rs 6,770 crore.
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