MUMBAI: Foreign portfolio investors have sold Rs 58,711 crore ($7 billion) worth of equity in Oct, being net sellers in all eight trading sessions so far. In Sept, FPI investments had reached a nine-month high of Rs 57,724 crore.
FPIs also offloaded Indian bonds, though net bond sales were modest at Rs 709 crore due to govt bond purchases. The sales reflect a rebalancing of investments after China announced a major economic stimulus package in late Sept.While CLSA has increased China’s weightage and reduced India’s overweight exposure from 20% to 10%, Jefferies cut India’s weightage by 1% and increased China’s by 2% on Oct 2, 2024.
“This massive selling didn’t impact the market much as domestic institutional investors – supported by strong fund inflows – absorbed the selling,” V K Vijayakumar of Geojit Financial Services, said.
FPIs are expected to invest around $2 billion (Rs 16,400 crore) in Hyundai’s Rs 27,810 crore IPO, but that may not offset outflows if the Iran-Israel conflict escalates. Additionally, the demand for Indian govt bonds following their inclusion in the JP Morgan Emerging Market Bond Index might slow as expectations for a US Federal Reserve rate cut shift from 50 to 25 basis points.
In Oct, FPIs bought Rs 3,755 crore of govt bonds under the fully accessible route (FAR), but sold Rs 1,634 crore under the general limit and Rs 950 crore under the voluntary retention route. FPIs also made net purchases of Rs 1,797 crore in hybrid instruments but sold Rs 300 crore in mutual funds. So far in 2024, FPIs have invested Rs 73,468 crore in equities and Rs 1.1 lakh crore in debt. “FPIs have adopted a ‘sell India, buy China’ strategy following China’s stimulus,” Vijayakumar said.
