With more than 10 days left in May, foreign investors have sold Indian stocks worth Rs 28,242 crore, according to the latest data from National Securities Depository Limited (NSDL).
FPIs remained net sellers of Indian stocks in April as investors are likely to move money out of their portfolios due to the ongoing geopolitical crisis in the Middle East.
According to NSDL data, FPIs remained net buyers for three consecutive months till mid-April and sold a cumulative total of Rs 8,671 crore worth of stocks by the end of the month.
“The main trigger for FII selling was that it outperformed the Hong Kong index Hang Seng Index, which had surged 19.33% in the past month. FIIs are moving from expensive markets like India to cheaper markets like Hong Kong where PE is listed. They are moving their money to ‘peace/earnings ratios of around 10 compared to India’s PE of around 20,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
“Going forward, there is likely to be a dramatic change in the flow of FPI stocks following the election results. Political stability will attract huge capital inflows.” He aggressively sold Indian stocks in the stock market and turned into a net seller. , before turning into a net buyer. Interestingly, while foreign investors have been net sellers of Indian stocks several times in the past, domestic institutional investors have been net buyers, compensating for outflows by foreign investors.
Back in December, FPIs had accumulated equity worth Rs 66,135 crore. According to historical data available on NSDL’s website, FPI inflows were Rs 9,010 crore in November.
To put this in context, we saw inflows of around Rs 1,71,107 crore during the year, but significantly more than a third of that came in December. Subsequently, strong capital inflows from foreign portfolio investors (FPIs) supported the benchmark stock index’s rally towards all-time highs.
Before November, FPI participation in Indian stocks was slow and they turned into net sellers. It sold Rs 14,768 crore and Rs 24,548 crore in September and October respectively. (Ani)
