FPIs turned the tables, became net sellers, sold shares worth ₹58,711 crore, what are the future indications?

Foreign portfolio investors were net sellers in October and have withdrawn Rs 58,711 crore from the stock market so far this month. Foreign investors sold due to the increasing conflict between Israel and Iran, the sharp rise in crude oil pr,ices and the strong performance of the Chinese market. Earlier, foreign investors had invested Rs 57,724 crore in September. This was the highest level in nine months. According to depository data, after withdrawing Rs 34,252 crore in April-May, foreign portfolio investors (FPIs) continuously invested money in the equity market since June.

What are the signs ahead?

Overall, except in January, April, and May, FPIs have been net buyers this year. “Global factors such as global activities and the situation regarding interest rates will play an important role in determining the flow of foreign investment into Indian stock markets in the coming times,” said Himanshu Srivastava of Morningstar Investment Research India. According to the data, FPIs made a net withdrawal of Rs 58,711 crore from equities between October 1 and October 11. Vinit Bolinkar, Head of Research, at Ventura Securities, said, “The growing conflict between Israel and Iran, especially in West Asia, has increased uncertainty in the market. This is making global investors risk-averse. FPIs have become cautious and are withdrawing money from emerging markets.”

Brent crude surges

He said that due to the global crisis, the price of Brent crude rose to $ 79 per barrel on October 10. Whereas on September 10 it was $ 69 per barrel. This has created a risk of increasing inflation and financial burden in India. VK Vijaykumar, Chief Investment Strategist, Geojit Financial Services, believes that after the announcement of monetary and fiscal measures to stimulate the slowing economy in China, FPIs are adopting the strategy of ‘sell in India, buy in China’. FPIs are investing money in shares in China, which are still relatively cheap. Overall, all these reasons have created a temporary blockage in the Indian stock market. So far this year, FPIs have invested Rs 41,899 crore in equity and Rs 1.09 lakh crore in the bond market.