According to depository data, during July 1-8, FPIs pulled out a net Rs 4,096 crore from the Indian stock exchanges.
FPI: The process of withdrawal of foreign portfolio investors (FPIs) from the Indian stock markets continues in July as well. However, now the pace of selling of FPIs has slowed down a bit. FPIs sold shares worth over Rs 4,000 crore in July amid a firming dollar and hike in interest rates in the US. Vijay Singhania, Chairman, TradeSmart said, “Market sentiment has improved on expectations of moderation in inflation amid fall in crude oil prices. The sentiment has also improved with the Reserve Bank’s efforts to arrest the fall in the rupee.
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What do experts say
- Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, however, believes that lower net outflows of FPIs do not mean any major change in stance. He said that the reasons for which FPIs were making withdrawals have not shown any significant improvement. FPIs have remained sellers for the last nine consecutive months.
- Hitesh Jain, Lead Analyst-Institutional Equity, Yes Securities, said FPI inflows will resume once inflation shows a clear indication of a fall from higher levels. He said that if things turn out to be correct regarding high inflation, then it is possible that the central bank will be soft on the interest rate front. This will once again increase investment in risk assets.
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Selling speed has decreased
According to depository data, during July 1-8, FPIs pulled out a net Rs 4,096 crore from the Indian stock exchanges. However, for the first time in the last several weeks, on July 6, such an opportunity came when FPIs bought Rs 2,100 crore. In June, FPIs sold shares worth Rs 50,203 crore. This is the highest level since March 2020. At that time, FPI withdrawals stood at Rs 61,973 crore. This year FPIs have withdrawn Rs 2.21 lakh crore from Indian stocks. Earlier, in the full year of 2008, he had withdrawn Rs 52,987 crore. Rupee has also weakened due to FPI withdrawals. Recently the rupee crossed the level of Rs 79 per dollar.
(Input-PTI)
