FPI in October Rs. 1,13,858 crores in sales.
While FPIs continued to exit the secondary market, exchanges through Rs. 32,351 crore in sales, while they had Rs. 9,931 crores of investments kept their faith in the primary market.
Adding to the concern, FPIs have also turned cautious on Indian debt markets, with outflows in the first fortnight of November at Rs. 4,717 crore has been reached.
“The cumulative effect of three factors has triggered the relentless FPI sell-off: one, higher valuations in India; two, concerns related to earnings downgrades; And three, Trump trade,” Dr. V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services said.
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Continued FPI outflows may pose challenges for Indian markets in the near term, as foreign investors continue to realign their portfolios based on global and domestic factors.
Trump’s victory has affected both equity and bond markets in the US. Equities have rallied in anticipation of the positive impact of corporate tax cuts promised by Trump and his pro-business policies.
Meanwhile, concerns over a potentially widening fiscal deficit under Trump have weighed on bond markets.
“A sharp jump in 10-year US bond yields to 4.42% has negative implications for emerging markets. This is also reflected in FPI selling in the debt market,” adds Vijayakumar.
Also Read: Investors trending towards ‘Sell India by USA’, not ‘Sell India by China’: Sameer Arora
(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of The Economic Times)
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