Worth Rs 27,142 crore sold stocks by foreign investors…
NEW DELHI: Since the beginning of October, the Indian stock market has been experiencing heavy selling pressure due to Foreign Portfolio Investors pulling large sums.
FPIs have sold Rs 27,142 crore worth of equities, just in the first three trading sessions of the month, according to data from the National Securities Depository Limited (NSDL).
The largest sell-off took place on October 4, when foreign portfolio investors (FPIs) sold equities valued at ₹15,506 crore, indicating a significant drop in investor confidence.This wave of selling has significantly impacted Indian equity markets, which have been under pressure for the past five sessions.
Shift in foreign investor strategy might be the primary reason for this sell-off according to experts. Many foreign portfolio investors (FPIs) are shifting their investments away from Indian stocks and reallocating funds to other Asian markets, including China and Hong Kong, where they anticipate more favorable returns. This sudden shift has turned FPIs into net sellers in Indian equities, contributing to the current market downturn.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, “The selling has been mainly triggered by the outperformance of Chinese stocks. The Hang Seng index shot up by 26 per cent in the last one month and this bullishness is expected to continue since valuations of Chinese stocks are very low and the Chinese economy is expected to do well in response to the monetary and fiscal stimulus being implemented by the Chinese authorities.”
He further added that “If the momentum in Chinese stocks continues FIIs may continue to sell in India where valuations are elevated. It remains to be seen how long the optimism lasts.”
Market analysts warn that the situation could be more challenging if tensions in the Middle East escalate, particularly if oil fields in the region are damaged and global markets could face further volatility.
Investors are advised to stay cautious in the coming weeks as global events unfold.