INSUBCONTINENT EXCLUSIVE:
In the debt markets, FPIs pulled out 900 crore through the General Limit and invested Rs 190 crore via Voluntary Retention Route (VRR)
during the period under review | Photo: Shutterstock2 min read Last Updated : Oct 06 2024 | 11:14 AM IST
Foreign investors turned net
sellers in October, offloading shares worth Rs 27,142 crore in just the first three days of October due to intensifying conflict between
Israel and Iran, a sharp rise in crude oil prices, and improved performance of Chinese markets.
The outflow came after FPI investment
reached a nine-month high of Rs 57,724 crore in September.Click here to connect with us on WhatsApp
Since June, Foreign Portfolio
Investors (FPIs) have consistently bought equities after withdrawing Rs 34,252 crore in April-May
factors like geopolitical developments and the future direction of interest rates will play a crucial role in determining the flow of
foreign investments into the Indian equity markets, Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment
Research India, said.
According to the data, FPIs made a net withdrawal of Rs 27,142 crore from equities between October 1 and 4, with
October 2 being a trading holiday.
"The selling has been mainly triggered by the outperformance of Chinese stocks," VK Vijayakumar, Chief
Investment Strategist, Geojit Financial Services, said.
The Hang Seng index shot up by 26 per cent per cent in the last one month, and
this bullishness is expected to continue since valuations of Chinese stocks are very low and the economy is expected to do well in response
to the monetary and fiscal stimulus being implemented by the Chinese authorities, he added.
"Escalating geopolitical tensions, driven by
the intensifying conflict between Israel and Iran, a sharp rise in crude oil prices, and the improved performance of the Chinese markets,
which currently appear more attractive in terms of valuations, were the primary reasons behind the recent exodus of foreign investments from
Indian equities," Morningstar's Srivastava said.
This, in turn, has contributed to the recent sharp correction in the Indian equity
markets.
In terms of sector, massive FPIs selling in financials, especially frontline banking stocks, have made their valuations
Long-term domestic investors may utilise this opportunity to buy high-quality banking stocks, Vijayakumar said.
In the debt markets, FPIs
pulled out 900 crore through the General Limit and invested Rs 190 crore via Voluntary Retention Route (VRR) during the period under
review.
So far this year, FPIs Invested Rs 73,468 crore in equities and Rs 1.09 lakh lakh crore in the debt market.(Only the headline and
picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated
feed.)First Published: Oct 06 2024 | 11:14 AMIST
