From Mint: 2024-06-08 13:12:25

Foreign portfolio investors (FPIs) have been selling in Indian markets due to global cues, including Lok Sabha elections 2024, Chinese market outperformance, and central bank policies, leading to a total outflow of ₹10,355 crore by June 7. FPIs shifted focus to Chinese stocks in Hong Kong with attractive valuations, triggering Indian selling.

FPIs offloaded ₹25,586 crore of Indian equities in May, with significant selling continuing in June. FPI activity in Indian markets remained volatile due to election results and outperformance in Chinese stocks, impacting sentiments. Domestic institutional investors (DIIs) continued buying, contrasting FII net selling in the cash segment.

Market experts predict a positive outlook for FPI flows into Indian debt in the long term, post global uncertainties. FPI strategy involves selling high valuation Indian stocks and buying cheap Chinese stocks through Hong Kong. While FPI selling pressure may continue due to high Indian market valuations, prospects for inflows in India remain optimistic.

FPIs pumped ₹35,098 crore into Indian equities in March 2024, the highest inflow recorded in the year’s early months. However, April and May saw significant outflows due to high US bond yields and Chinese market outperformance. FPI activity remained unstable based on global cues and Indian market valuations.

In 2023, FPIs bought ₹1.71 lakh crore in Indian equities, with total investments at ₹2.37 lakh crore across debt, hybrid, and equities. Trends reversed throughout the year, with strong inflows in December post US Federal Reserve signals. FPIs’ net investment in Indian debt markets reached ₹68,663 crore in 2023.

Disclaimer: The views and recommendations in this analysis are not endorsed by Mint. Investors are advised to consult experts before making investment decisions. Market conditions can change rapidly, and individual circumstances may vary.



Read more at Mint: FPIs dump ₹10,355 crore in Indian markets as selling streak extends to June; Inflows diverted to THIS market instead