Indian Stocks: FIIs sold Indian stocks worth Rs 7,000 cr in 3 sectors. Will it worsen in Samvat 2079?
Financial services, which is the largest bet of FIIs, saw net selling of Rs 4,081 crore from 1-15 Oct, followed by IT (Rs 1,667 crore) and FMCG (Rs 1,188 crore). Besides, oil and gas, auto and realty stocks also saw net selling by FIIs.
On the other hand, buying was seen in construction, power, capital goods and healthcare segments.
However, analysts say that the September quarter results have been good so far with financials, banks in particular, beating expectations. “FPIs are unlikely to sell heavily in the near term. But they will turn to sustained buyers only when the dollar starts declining. This in turn, will depend on the trajectory of US inflation and the Fed’s monetary stance,” Dr VK Vijayakumar, Chief Investment Strategist at .
FIIs which started offloading Indian equities from last year much ahead of the US Fed’s quantitative tightening and rate hike cycle, have sold off stocks worth Rs 174,781 crore so far in the calendar year.
Will the selloff deepen in Samvat 2079?
With India being the only market offering growth and stability along with status of least depreciating currency, analysts said we may not see major withdrawal of foreign funds from equities. “On a full year basis, we may not see FII flows in the next Samvat to be worse than that in the current Samvat as incrementally Indian markets will not look very expensive vis-a-vis its peers or its earnings growth,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
Given solid inflow from domestic and retail investors, the heavy outflow of FIIs have failed to impact stock prices negatively to a large extent. “The ‘Mutual fund Sahin Hai’ campaign has created immense awareness about the stock market, and along with the advent of online account opening has greatly improved domestic participation. This trend will continue to increase and FII flows will begin to matter less,” said Hersh Tolani, Fund Manager, Tolani Investment Partnerships.
(With data inputs from Ritesh Presswala)
