Foreign investors pulled Rs 34,993 crore from equities in August, led by Singapore and Ireland. Malaysia and Germany, however, turned net buyers, alongside selective inflows into debt.
MOFSL noted that the FII exodus resulted into a mild impact on Indian equities, thanks to the counter-buying from domestic investors which held the fortress.
The Sensex and Nifty indices have fallen by 3.5% in January till date, marking their sharpest monthly decline since 2017 and surpassing the 3.07% drop recorded in January 2021. Broader indices like BSE MidCap and BSE SmallCap slumped over 9 percent each so far this month.
FII flows are overall positive in India in 2024 (and negative in secondary markets), says the market veteran
In the first two weeks of August, FIIs have so far offloaded roughly Rs 18,824 crore from Indian equity markets in total, at a time of sharp volatility in local equities.
So far in 2024, FPIs were net sellers at $3.39 billion – with only March seeing a net buy figure. With election-related uncertainty behind us, any major selling by FPIs is unlikely, say experts.
According to Pranav Haldea, Managing Director, PRIME Database Group, Indian markets are moving towards self reliance with the share of DIIs set to overtake that of FIIs in the next few quarters.
Analysts believe that any outflows from FIIs are unlikely to destabilise the local market.
Last month, institutional investors were net buyers of Indian stocks worth more than Rs 8,000 crore. But still, Nifty cracked by more than 2 percent during the period -- in other words, February saw retail investors losing faith
Even as 2022 was a bad year for investors, FII sentiment seems to have turned slightly better due to relatively cheap valuations and strong growth prospects. Although the hangover of war escalating remains, heightened tensions globally could still put a dampener on investor sentiment overseas with FIIs rushing to safety.
The movement in the rupee and the progress of monsoon would also be watched by investors, according to analysts.
In such a tumultuous market environment, it becomes necessary to find one’s bearings by taking stock of the drivers behind the volatility
Speaking to CNBC-TV18 Richard Harris, Chief Executive of Port Shelter Investment Management said that the US Fed has gone so far in not raising rates.
Dipan Mehta, Member, BSE & NSE believes action currently is in midcaps and will continue for the next 12-24 months.
The trade data, especially the export data, was not too strong and for the time being both Reserve Bank of India and Government of India are not worried by an appreciating rupee.
There is not much reason for FIIs to stay invested in India and will continue to exit the market, says UR Bhat, MD, Dalton Capital Advisors.
In comparison to the rest of the Asian region, outflows from India have been relatively less. Van Der Linde believes there will be a slowdown in terms of FII outflows from India. He says, most FIIs do not have many options in Asia, as China, Korea no longer look attractive
Rupee hits over 11-mth low vs dollar, may head towards 57-mark
Mecklai graph of the day: The FII inflows have been the highest in the month of February this year so far and poured around USD 1195.62 million in the Indian economy.
Moody’s downgrade of SBI has delivered a blow to the Indian economy and its banking sector. According to Anant Narayan of Standard Chartered Bank, this move has increased the risk of FII outlfows from India which will further hurt India Inc.
Anant Narayan, managing director- regional head of fixed income and currency trading- South Asia, Standard Chartered Bank believes that the huge interest rate differentials between India and the developed world will work in favour of the rupee.