FPIs sold shares in August valued Rs 10,921 crore
According to V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, Foreign Portfolio Investors (FPIs) shifted from being buyers to sellers in August after a sustained period of three months during which they invested a total of Rs 1,37,603 crore. Data from the National Securities Depository Limited (NSDL) reveals that FPI investments in August, up to the 18th, amounted to Rs 8,993 crore. However, it’s important to note that this figure includes bulk deals and investments made through the primary market. In the cash market, Foreign Portfolio Investors sold stocks worth Rs 10,921 crore during August, with them being sellers for most of the month, buying on only three days.
Vijayakumar pointed out that the strength of the US dollar index, which is well above 103, and the US 10-year bond yield remaining around 4.25%, are short-term factors that have a negative impact on FPI investments in emerging markets like India. Despite this shift in Foreign Portfolio Investors’ behavior, they have continued to be consistent buyers in sectors like capital goods and power, but they have started selling in financial sectors. While Domestic Institutional Investors (DIIs) have been buying to counter FPI selling, this may not be sufficient to prevent a decline in the market.
Given the prevailing conditions, with a strong US dollar and rising US bond yields, it is expected that Foreign Portfolio Investors will likely continue to sell in the near-term.