FPIs offload ₹10,164 crore in Indian equities this month; What's in it for domestic investors?

livemint.com:

₹10,164 crore worth of Indian equities and offloaded a total of ₹10,100 crore as of September 22, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL ) data. The ₹10,164 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 ₹18,260 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 valuations remain high even after the recent pull back and US bond yields are attractive ( the US 10-year bond yield is around 4.49 per cent) FIIs are likely to press sales so long as this trend persists. It would be irrational to expect the FIIs to buy aggressively when the US 10-year bond yield is around 4.49 per cent and the dollar index is above 105,'' 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. Regarding sector specific investments, analysts observed that FPIs have been consistently buying in capital goods. Recently, they have been buyers in health care sector as well.