After buying stocks in August, FPIs are turning sellers again

Indian markets have outperformed the world by falling much less in the past few months, but that has not stopped foreign portfolio investors (FPIs) from pulling out funds as the rupee saw a sharp decline against the dollar.

After adding funds in August, FPIs turned net sellers again in September. According to exchange figures, FPIs net sold shares worth Rs 18,303 crore in cash alone. On a net basis, which includes all buying and selling of equities, derivatives and debt, the FPIs were sellers to the tune of ₹7,600 crore. FPI outflows in India so far touched 1.68 lakh crore in 2022, data shows.

FPIs’ cash market sales in September were the highest since June, when they had sold shares worth INR 58,112 crore, according to stock market figures. While FPIs were net sellers in the cash markets, domestic institutional investors made net purchases of stocks worth INR 14,119 crore, data shows.

Fall from the top

On Monday, traders would see movement in US stock futures. Markets are likely to open lower on Monday, as the Dow Jones, S&P and Nasdaq had closed down about 1.7 percent. Friday. The US markets are down around 18-22 percent from their lifetime highs compared to the Sensex and Nifty, which are down less than 8 percent from their peaks.

In September alone, the benchmark indices fell by almost 6.6 per cent. The Nifty fell to around 16,800 from the highs of around 18,000 during the month as market sentiments remained bearish due to the US Federal Reserve’s aggressive stance on interest rates. In September, the Fed raised interest rates by 0.75 percent and has a roadmap to raise rates to around 5 percent in December. In India, the rapid decline in the rupee has forced India’s central bank to embark on an aggressive rate hike, experts said.

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