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Business News/ Markets / Stock Markets/  FPIs turn net sellers in January, offload 24,734 crore in Indian equities: Why did they snap buying streak?
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FPIs turn net sellers in January, offload ₹24,734 crore in Indian equities: Why did they snap buying streak?

FPIs have sold ₹24,734 crore worth of Indian equities and the total outflow stands at ₹9,663 crore as of January 25, taking into account debt, hybrid, debt-VRR, and equities

FPIs continued to be sellers in the cash market. Photo: iStockPremium
FPIs continued to be sellers in the cash market. Photo: iStock

Foreign portfolio investors (FPIs) snapped their buying streak in January and turned massive sellers in Indian markets, driven by global cues. However, FPIs started 2024 on a positive note as investments saw a sharp uptick in December 2023 after FPIs reversed their three-month selling streak in November 2023.

FPIs have sold 24,734 crore worth of Indian equities and the total outflow stands at 9,663 crore as of January 25, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL) data.

"FPIs continued to be sellers in the cash market having sold equity worth 27664 crores through 25th January. FPIs were sellers in autos and auto ancillary, media and entertainment and marginally in IT. They bought in oil and gas, power and selectively in financial services,'' said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Also Read: Dividend Stocks: Havells India, Siemens, MRPL, Metro Brands, others to trade ex-dividend next week; check full list

Foreign institutional investors (FIIs) also emerged net sellers for all sessions last week with a total divestment of 12,194.38 crore, while domestic institutional investors bought for all sessions with a total investment of 9,701.46 crore. Market experts also said that the FPI strategy of pushing the market down is not working since their selling is countered with buying by domestic and individual investors.

FPIs turn net sellers: What's behind the trend reversal?

FPIs snapped their buying streak over global cues as the US bond yields rose from 3.9 per cent to 4.18 per cent, triggering capital outflows from emerging markets such as India, according to market experts.

‘’The rising bond yields in the US is a matter of concern and this has triggered the recent bout of selling in the cash market. The rally in global stock markets was triggered by the Fed pivot which saw the 10-year bond yield falling from five per cent to around 3.8 per cent. Now the 10-year is back at 4.18 per cent which indicates that the Fed rate cut will come only in H2 of 2024,'' added Dr. V K Vijayakumar.

FPIs have been buying IT stocks this month after the management commentary following the Q3 results of IT managers indicated optimism of demand revival in the sector, according to analysts.

FPI activity in Indian markets

The inflow intensified last month on strong global cues after the US Federal Reserve signalled the end of its tightening cycle and raised expectations of a rate cut in March 2024. This led to a crash in US bond yields and triggered foreign fund inflows into emerging markets like India.

In December, FPIs were big buyers in financial services and also in IT. FPIs also bought in sectors like autos, capital goods, oil and gas and telecom, according to Dr. V K Vijayakumar.

For the entire calendar year 2023, FPIs bought 1.71 lakh crore in Indian equities and the total inflow stands at 2.37 lakh crore taking into account debt, hybrid, debt-VRR, and equities, according to NSDL data. FPIs' net investment in Indian debt market stands at 68,663 crore during 2023.

FPI inflows into Indian equities during November 2023 stood at 9,001 crore, compared to over 39,000 crore worth of shares sold in September and October together, according to NSDL data. Taking into account debt, hybrid, debt-VRR, and equities, FPI inflows were at 24,546 crore during the month.

Overall, only four months in 2023--January, February, September, and October- saw net FPI outflows from Indian equities. May, June, and July each recorded FPI inflows above 43,800 crore.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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ABOUT THE AUTHOR
Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at nikita.prasad@htdigital.in.
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Published: 27 Jan 2024, 05:23 PM IST
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