New Delhi: After starting the week on a strong buying spree, foreign portfolio investors (FPIs) turned net sellers in the Indian equity market and the net investment turned negative this week with Rs 977 crore, according to data from the National Securities Depository Limited (NSDL).
The data revealed that from December 16 to 20, FPIs initially showed robust buying activity, purchasing equities worth Rs 3,126 crore in the first two trading sessions of the week.
However, the trend reversed in the subsequent three sessions, with FPIs selling equities worth over Rs 4,103 crore. This heavy selling dragged the net weekly investment into negative territory.
Despite this recent bout of selling, the overall net investment by FPIs in December remains positive. The data highlighted that FPIs have invested Rs 21,789 crore in Indian equities so far this month, reflecting continued optimism about the country’s economic growth prospects.
Market analysts believe the selling pressure could be attributed to global factors, such as concerns over interest rate hikes by central banks, geopolitical uncertainties, and profit-booking after recent market rallies.
Ajay Bagga, Banking and Market expert told ANI that “This week was one of “risk off” in global markets due to the Fed. While US markets recovered a bit on Friday, EMs faced the wrath of a strong US dollar and rising US bond yields, both of which lead to FPI outflows from EMs. India faced these global headwinds with the Rupee hitting an all-time low against the US dollar. FPI selling has been strong in the past week on the back of these global cues. A Santa claus rally has got negated for now”.
Before this Foreign Portfolio Investors (FPIs) sold equities worth Rs 21,612 crore in November, marking a significant decline in selling compared to Rs 94,017 crore in October, according to the data by the National Securities Depository Limited (NSDL).
In June, July, August, and September, the FPIs bought stocks worth Rs 26,565 crore, Rs 32,365 crore, Rs 7,320 crore, and Rs 57,724 crore, respectively. As per definition, Foreign Portfolio Investment (FPI) involves an investor buying foreign financial assets.
While this week ended with FPIs as net sellers, their positive net investment for December indicates sustained confidence in India’s growth story.