FPIs continue selling streak, offload ₹4,768 cr in Indian equities so far in September; What lies ahead?
Foreign portfolio investors (FPIs) continued their selling streak and have emerged as net sellers so far in September, with a muted performance on D-Street on rising US bond yields and a stronger dollar. FPIs have sold ₹4,768 crore worth of Indian equities and offloaded a total of ₹2,968 crore as of September 8, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL ) data. The ₹4,768 crore-figure also includes bulk deals and investment in primary market.
Excluding the bulk deals and investment through the primary market, the sell figure in the cash segment rises to ₹9,579 crore, according to analysts. Rising bond yields in the US and strong dollar index are negative for capital flows. This was the primary reason why FPIs turned net sellers in the cash market this month.
Strength in the US dollar index and the US 10-year bond yield remaining high are short-term negatives for FPI flows to emerging markets like India, according to analysts. "Since the market is at record highs and valuations are high FIIs are likely to press sales in the coming days. With high bond yields in the US (the 10-year is at 4.28 per cent) and the dollar index above 105, FIIs are likely to sell more,'' said Dr.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. In August, FPIs bought ₹12,262 crore worth of Indian equities and infused a total of ₹18,338 crore as of August 31, compared to its prior three months of sustained buying, according to NSDL data. Foreign institutional investors (FIIs) shifted gears and invested in Indian equities for the second straight session on Friday, September 15, after domestic equity benchmarks Sensex and Nifty scaled to lifetime highs.
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