FPI in Share Market: Foreign investors disillusioned with Indian market, withdrew Rs 8000 crore this week
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FPI in Share Market: Foreign investors are becoming disillusioned with the Indian market. For the last few weeks, investors have been continuously withdrawing money by selling their shares. Investment was at the highest level in March this year. Since then there is a decline. It is being told that foreign portfolio investors (FPIs) sold equity worth Rs 8,000 crore in the market in the first week of October due to the rise in dollar and continuous increase in US bond yields. Earlier in September also, FPIs remained net sellers and had withdrawn Rs 14,767 crore. FPIs were continuously buying in the last six months from March to August and Rs 1.74 lakh crore came into the Indian stock market during this period. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that in the coming times, in view of the strength of the dollar and US bond yields, FPIs are not likely to become buyers in the market any time soon.
Selling was seen in September also
According to the data, FPIs sold shares worth Rs 8,000 crore this month till October 6. India continues to top among emerging economies in attracting FPI this year, but September saw a selloff and October has also started with the same trend. Himanshu Srivastava, associate director at Morningstar India, attributed the selloff to economic uncertainties in the US and Eurozone as well as growing concerns about global economic growth. This scenario prompted foreign investors to become risk averse. He said that apart from this, due to high crude oil prices, stable inflation figures and the fear that interest rates will remain at high level for longer than expected, foreign investors adopted a wait and see attitude. Himanshu Srivastava said that the below normal monsoon in India and its impact on inflation is also a matter of concern for the domestic economy, which foreign investors would also be aware of. The selling by FPI was compensated by buying by domestic institutional investors (DII). During the period under review, FPIs invested Rs 2,081 crore in the country’s bond market. With this, till now this year the total investment of FPI in equity has exceeded Rs 1.12 lakh crore and in bond market has exceeded Rs 31,200 crore.
Market capitalization increased by Rs 86,234.73 crore
Amidst the turmoil in the global market, the top five companies of the Indian market have earned huge profits. The combined market valuation of five of the country’s top 10 most valuable companies increased by Rs 86,234.73 crore last week. In this, Tata Consultancy Services (TCS) was the most profitable. Apart from TCS, HDFC Bank, Infosys, Hindustan Unilever and Bajaj Finance were among the gainers. On the other hand, Reliance Industries, ICICI Bank, ITC, State Bank of India and Bharti Airtel declined. Last week, BSE Sensex rose 167.22 points or 0.25 percent. During this period, the market valuation of TCS increased by Rs 32,730.22 crore to Rs 13,24,649.78 crore. Bajaj Finance added Rs 21,697.96 crore, taking its valuation to Rs 4,94,884.37 crore. Infosys’ valuation increased by Rs 18,057.94 crore to Rs 6,13,655.04 crore and Hindustan Unilever’s valuation increased by Rs 7,730.16 crore to Rs 5,87,104.12 crore. The market capitalization of HDFC Bank increased by Rs 6,018.45 crore to Rs 11,63,164.31 crore. On the other hand, the valuation of Reliance Industries declined by Rs 19,336.49 crore to Rs 15,68,216.88 crore and the valuation of ICICI Bank declined by Rs 4,671.54 crore to Rs 6,62,057.43 crore. However, Reliance Industries remained the most valuable company in the country.
What do experts say
Pravesh Gaur, Senior Technical Analyst, Swastik Investmart Limited, said that all eyes will be on the corporate results of the second quarter of the current financial year. TCS results will be out on October 11 and HCL Technologies and Infosys results will be out on October 12. He said that market participants will also keep an eye on the movement of rupee against dollar and crude oil prices. The attitude of foreign institutional investors (FII) and domestic institutional investors (DII) will also affect the market. He said that important announcements are also to be made on the macroeconomic front in the week under review. Under this, industrial production and manufacturing production figures for August will be released on October 12. He said that the inflation rate for September will be announced, which will provide information about the economic health of the country. Apart from this, Wholesale Price Index (WPI) data for September will come on October 13. Shrikant Chauhan, Head of Equity Research (Retail), Kotak Securities Limited, said that the market will take further cues from the upcoming quarterly results. Vinod Nair, head of research, Geojit Financial Services, said that from this week traders will keep an eye on the quarterly results of IT and banking sectors.
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