New Delhi: Foreign portfolio investors (FPIs) have once again transitioned into net sellers within the Indian stock markets, following a period of sustained net buying over the preceding four months.
It is noteworthy that the aggregate value of stocks sold by these investors in October reached the highest level recorded in a single month, according to data.
They liquidated stocks valued at Rs 94,017 crore during October, as per information provided by the National Securities Depository Limited.
In contrast, during the months of June, July, August, and September, they engaged in purchases worth Rs 26,565 crore, Rs 32,365 crore, Rs 7,320 crore, and Rs 57,724 crore, respectively.
FPIs have significantly contributed to the upward trajectory of the stock market, with the exception of the most recent downturn. Foreign Portfolio Investment (FPI) refers to the investment of foreign financial assets by an investor.
The Bombay Stock Exchange (BSE) has depreciated from its peak of 85,978 points to its current level of 79,389 points. The recent market sessions have been characterized by a bearish trend, marked by fund withdrawals and lower-than-anticipated earnings reports from Indian corporations.
On Thursday, the BSE closed at 79,389.06 points, marking a decline of 553.12 points or 0.69 per cent, while the Nifty fell to 24,205.35 points, a decrease of 135.50 points or 0.56 per cent.
"We anticipate a continuation of the market consolidation in the near term; a reversal in this trend will hinge on a reduction in the selling intensity of foreign investors and the outcome of the US presidential election," stated Vinod Nair, the Head of Research at Geojit Financial Services in a recent interview.
It is noteworthy that during a period when foreign investors were selling Indian equities, domestic institutional investors maintained their position as net buyers, compensating for the outflows by foreign investors. They managed to accumulate stocks worth in the thousands of crores, surpassing the holdings of FPIs in October, as evidenced by the data. This accumulation likely served to mitigate the impact of the sharp market decline.
The recent upward movement of the indices, particularly over the last three months, can be attributed to robust GDP growth, stable inflation, strong domestic liquidity, and favorable monsoon conditions. The activity of FPIs in June and July was significantly influenced by the election results, as the transition to the new government proceeded smoothly.
