FPIs turn sellers on strong US dollar, bond yields; August investment at ₹8,394 crore so far

livemint.com:

Foreign portfolio investors (FPIs) performance remains muted on D-Street so far in August due to the rising US bond yields and stronger US dollar, after sustained buying in the last three months. FPIs bought ₹8,394 crore worth of Indian equities and infused a total of ₹13,948 crore as of August 18, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL ) data. The ₹8,394 crore-figure also includes bulk deals and investment in primary market.

In the cash market FPIs sold stocks for ₹10,921 crore and were net sellers on 10 days and buyers in only three days in August, so far, according to analysts. However, the trend of FPI selling in August has been countered by strong buying led by domestic institutional investors (DIIs). Dr.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. After three months of sustained buying with cumulative investment of ₹13, 7603 crore, FPIs turned sellers in August….Strength in the dollar index at well above 103 and the US 10- year bond yield remaining around 4.25 per cent are short-term negatives for FPI flows to emerging markets like India. FPIs continue to be consistent buyers in capital goods and power.

And, of late, they have started selling in financials. FPI selling is countered by DII buying, but this is turning out to be inadequate to arrest the decline in the market. In view of the strong dollar and rising US bond yields, FPIs are likely to continue selling, in the near-term.