New Delhi [India] Indian markets are at an all-time high despite continued selling under pressure from foreign portfolio investors.
BSE Sensex hit an all-time high on Friday, while the Nifty 50 index closed on a positive note at 23,267.75 with a gain of 446.35 points or 1.96 per cent and hit an all-time high of 23,320.20.
However, foreign portfolio investors were net sellers in Indian markets for the third consecutive month in June.
According to the NSDL (National Securities Depository Limited) website, FPIs have sold equities worth over Rs 14,794 crore in the equity markets so far this month. This follows a similar trend from last month when foreign investors were also net sellers, leading to increased volatility in Indian markets.“FPIs consider Indian valuations to be too high and hence, capital is shifting to cheaper markets. FPI pessimism about Chinese stocks is over and there is a trend to invest in Chinese stocks listed on Hong Kong Exchanges since the valuations are undervalued. “Chinese stocks have become very attractive,” said Dr VK Vijayakumar, chief investment strategist at Geojit Financial Services.
According to NSDL data, FPIs sold equities worth Rs 25,586 crore in May, indicating a sustained and excessive selling pattern in the cash market.
So far, FPIs have disinvested equity worth Rs 38,158 crore for the year 2024.A notable trend in FPI activity is considerable selling through the exchanges along with buying through the primary market route.
The market is gradually stabilizing after high volatility generated by election results including exit polls and actual results.
Market experts highlight the high valuations of Indian stocks, especially in the broader market. These higher valuations are likely to attract more sales by FPIs in the future.
The budget will also indicate the policy direction of the new government and the market will also adjust itself according to the budget announcements.
The pattern of FPIs being net sellers extends to April as well.During that month, the geopolitical crisis in the Middle East prompted investors to remove funds from their portfolios.
Despite being net buyers in the first three months of the year till mid-April, FPIs sold stocks worth Rs 8,671 crore cumulatively by the end of the month.
Overall, selling by FPIs is contributing to the ongoing volatility in Indian markets. The perception of high valuations in Indian equities, coupled with attractive valuations in other markets such as China, is driving this trend.
As FPIs continue to adjust their portfolios in response to global market conditions and geopolitical developments, Indian markets are likely to react accordingly.
BSE Sensex hit an all-time high on Friday, while the Nifty 50 index closed on a positive note at 23,267.75 with a gain of 446.35 points or 1.96 per cent and hit an all-time high of 23,320.20.
However, foreign portfolio investors were net sellers in Indian markets for the third consecutive month in June.
According to the NSDL (National Securities Depository Limited) website, FPIs have sold equities worth over Rs 14,794 crore in the equity markets so far this month. This follows a similar trend from last month when foreign investors were also net sellers, leading to increased volatility in Indian markets.“FPIs consider Indian valuations to be too high and hence, capital is shifting to cheaper markets. FPI pessimism about Chinese stocks is over and there is a trend to invest in Chinese stocks listed on Hong Kong Exchanges since the valuations are undervalued. “Chinese stocks have become very attractive,” said Dr VK Vijayakumar, chief investment strategist at Geojit Financial Services.
According to NSDL data, FPIs sold equities worth Rs 25,586 crore in May, indicating a sustained and excessive selling pattern in the cash market.
So far, FPIs have disinvested equity worth Rs 38,158 crore for the year 2024.A notable trend in FPI activity is considerable selling through the exchanges along with buying through the primary market route.
The market is gradually stabilizing after high volatility generated by election results including exit polls and actual results.
Market experts highlight the high valuations of Indian stocks, especially in the broader market. These higher valuations are likely to attract more sales by FPIs in the future.
The budget will also indicate the policy direction of the new government and the market will also adjust itself according to the budget announcements.
The pattern of FPIs being net sellers extends to April as well.During that month, the geopolitical crisis in the Middle East prompted investors to remove funds from their portfolios.
Despite being net buyers in the first three months of the year till mid-April, FPIs sold stocks worth Rs 8,671 crore cumulatively by the end of the month.
Overall, selling by FPIs is contributing to the ongoing volatility in Indian markets. The perception of high valuations in Indian equities, coupled with attractive valuations in other markets such as China, is driving this trend.
As FPIs continue to adjust their portfolios in response to global market conditions and geopolitical developments, Indian markets are likely to react accordingly.
