FPIs emerge net sellers for 2nd month in a row, offload ₹20,356 crore in Indian equities; here's why
₹20,356 crore worth of Indian equities and offloaded a total of ₹14,561 crore as of October 27, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL) data. The ₹20,356 crore-figure also includes bulk deals and investment in primary market. The selling by FPIs through exchanges has been higher at ₹25,575 crore, according to NSDL data.
FPIs have reversed the prior three-month trend of sustained buying and emerged net sellers in September and October. Surging US bond yields have been the major reason for FPI outflows since last month, according to analysts. ‘’Heightening geopolitical tension in the Middle East and US Federal Reserve hinting at more rate hikes may see treasury yields staying higher, which could prompt further foreign fund outflows from emerging markets, including India,'' said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Also Read: FIIs offload ₹1,500 crore in Indian equities, DIIs invest ₹314 crore as Nifty50 snaps 6-day losing streak FPIs were sellers in sectors like financials, power, FMCG and IT. ‘’The primary reason for the sustained selling is the sharp spike in US bond yields which took the 10-year yield to a 17-year high of 5 per cent. The yield has now declined to 4.84 per cent.
With such high bond yields it is rational for FPIs to take out some money. The Israel-Hamas conflict in West Asia and the uncertainty surrounding the conflict has added to negative sentiments in the market,'' said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
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