FPIs double down on bearish bets ahead of Trump 2.0
Subscribe to enjoy similar stories. The change of guard in America looms large over India's stock market, with foreign portfolio investors (FPI) raising bearish bets close to record levels a day ahead of Donald Trump's inauguration as the 47th President.
Market experts warned that Indian equities could be buffeted by the unpredictable nature of the incoming US president's policies, in addition to tepid earnings and economic growth back home. Besides net selling ₹44,396 crore worth of shares in the month through 16 January, FPIs have raised cumulative bearish bets on Nifty and Bank Nifty futures to 326,838 contracts as of Friday, with 49,028 contracts being added last week alone.
These are FPIs' highest bearish positions since 4 June when they were cumulatively short 355,379 contracts amid the Lok Sabha election results, according to analytics firm IndiaCharts. "The market today remains uncertain about Trump, quarterly earnings and economic growth, which, though improving, is subdued," said Nilesh Shah, managing director of Kotak Mahindra AMC.
Shah explained that FPIs have used India as a "revolving door" since 2021 , buying at times and selling at others, and are currently underweight India on a valuation basis. Indeed, India, which had overtaken Taiwan to the second spot by weighting on the MSCI Emerging Markets Index (EM) early last year, slipped below the tiny island nation after the recent market correction.
As of December-end, India's weighting on the index, used by global money managers to allocate funds to EMs, stood at 19.43%, behind Taiwan (19.72%) and China (27.79%). Also read | When to take a step back from the stock markets Nirmal Jain, founder, IIFL Group, said that while markets have discounted Trump's
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