Amid market crash & recovery, FPIs pull out Rs 18,109 crore so far in June.
Net FPI outflows reached a record high of Rs 12,436 crore on June 4, the day the Lok Sabha election results were announced, causing the Sensex to plummet by 6 percent.
After investing Rs 6,850 crore on June 3, following the exit poll results, foreign portfolio investors (FPIs) became significant sellers in the stock market over the next four days, amid fluctuations caused by the unexpected poll outcome.
According to exchange data, FPIs have withdrawn Rs 18,109 crore from the cash market (excluding IPO investments) in June so far. Conversely, domestic institutional investors (DIIs) have made net purchases of Rs 6,864 crore in equities during the same period.
On June 4, the day the Lok Sabha election results were announced, net FPI outflows hit a record high of Rs 12,436 crore, leading to a 6 percent drop in the Sensex. Although the Sensex rebounded by 3.2 percent on June 5, FPIs continued selling, with Rs 5,656 crore in outflows, and again on June 6, with Rs 6,867 crore withdrawn.
Analysts attribute recent FPI withdrawals to high valuations and election-related uncertainties, with investments shifting to China. However, with the election results concluded and the formation of a new government under the National Democratic Alliance (NDA) coalition, analysts anticipate a resurgence in FPI investments in India. Deepak Jasani, Head of Retail Research at HDFC Securities Ltd, suggests that events like the passage of a confidence vote, announcement of ministerial portfolios, and policy declarations (including the Union Budget) could bolster foreign investor confidence.
Jasani also noted that Indian equity valuations might improve if the Nifty EPS (earnings per share) is upgraded due to economic momentum post-government formation. Additionally, potential rate cuts by the US Federal Reserve or the RBI, along with timely and well-distributed monsoon rains, could prompt FPIs to revise corporate earnings estimates and resume investing.
On Thursday, the 30-share Sensex increased by 692.27 points (0.93 percent) to close at 75,074.51, while the broader Nifty rose by 201.05 points (0.89 percent) to end at 22,821.4.
We hate spam as much as you do
© Hindeez 2024, All Rights Reserved
