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FPI Selling Hits Rs 23,676 Crore Amid Crude, Liquidity Concerns
Foreign investors sold a large amount of Indian shares this month.
Their selling through stock exchanges reached Rs 23,676 crore by September 19.
However, they continued investing in new share offerings and other primary-market deals.
This helped explain why the primary market remained strong.
Higher oil prices made investors worry about inflation and economic growth.
Rising bond yields and a US Federal Reserve rate hike also created concerns about money available globally.
The Indian economy and expected improvement in company earnings could still attract investors.
Future investment may depend heavily on oil prices and the Iran-US conflict.
Foreign portfolio investors sold Rs 23,676 crore through exchanges by September 19.
FPI primary-market investment reached Rs 2,703 crore this month and Rs 48,550 crore this year.
Elevated crude prices and rising global bond yields pressured Indian investor sentiment.
The Sensex fell 0.65% and the Nifty declined 0.22% last week.
Resilient Indian growth and expected earnings improvements could support future FPI flows.
- Who
- Foreign portfolio investors, Indian market participants, and analysts including Dr VK Vijayakumar.
- What
- FPI selling through exchanges reached Rs 23,676 crore this month, while primary-market investment continued.
- Where
- Indian equity markets and primary markets.
- When
- Through September 19; the reported market decline occurred last week.
- Why
- High crude oil prices, rising global bond yields, and concerns about global liquidity weakened sentiment, while resilient Indian growth remained a positive factor.
Market Risks
Market Supports
Near-term FPI outlook
Market Risks
Elevated crude prices, high US bond yields, inflation concerns, and global liquidity uncertainty could continue discouraging FPI flows.
Market Supports
A resilient Indian economy and expectations of stronger earnings growth could support future FPI investment.
Primary versus secondary markets
Market Risks
Weak FPI flows and a tepid secondary-market performance indicate pressure on listed Indian equities.
Market Supports
Continued primary-market investment, totaling Rs 48,550 crore this year, is supporting an ongoing primary-market boom.
Key facts
- Exchange outflows
- Rs 23,676 crore through September 19
- Primary-market investment this month
- Rs 2,703 crore
- Primary-market investment this year
- Rs 48,550 crore
- Sensex close
- 74,294.46, down 0.65% last week
- Nifty close
- 23,346.40, down 0.22% last week
- US 10-year yield
- 5%, according to the report
- Federal Reserve action
- A 25-basis-point rate hike increased uncertainty around global liquidity
Sources
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