Foreign investors sold shares worth Rs 27,000 crore in three sessions; Effect of Israel-Iran conflict and better performance of Chinese markets is visible
Foreign portfolio investors (FPIs) have sold shares worth Rs 27142 crore from the Indian markets in just three trading sessions of October. The market capitalization of nine out of the top 10 companies listed on the BSE has decreased by Rs 4.74 lakh crore. This week, IPOs of only two companies will open for subscription. Know in detail in this article.
The increase in the price of crude oil due to the increasing war between Israel and Iran, along with the good performance of Chinese markets, is hurting the Indian stock market. Due to the mentioned reasons, FPIs have sold shares worth Rs 27,142 crore in just three trading sessions in October.
FPIs had bought shares worth Rs 57,724 crore in September, which was the highest FPI investment in any one month in 2024. According to data from the National Securities Depository Limited (NSDL), FPIs have been continuously buying equity markets since June after withdrawing Rs 34,252 crore during April-May.
Due to this, FPIs have remained net buyers so far in 2024. During the end of September, the net inflow of FPIs for the entire year had crossed Rs 1 lakh crore. However, after the recent outflow, FPI investment in equity markets has slid to around Rs 73,000 crore.
Besides equity, FPIs have pulled out Rs 900 crore from debt or bond markets in three trading sessions this month. Total investment of FPIs in debt markets has, however, remained above Rs 1 lakh crore so far in 2024.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, this FPI selling is primarily because of the stronger performance of Chinese markets. Hong Kong's key index Hang Seng has staged a rally of 26% in the last one month. This trend would be followed by further upselling since the valuation of Chinese stocks is quite low. Besides that, economic stimulus measures are also expected to keep the Chinese markets bullish.
The sharp fall in the domestic stock markets last week also had an effect on the market capitalization of the companies. In this period, the market capitalization of nine of the top 10 companies listed on BSE declined by Rs 4.74 lakh crore. The capitalization of Reliance Industries has dropped by Rs 1.88 lakh crore.
After the uptrend in the pace of IPO activity in the recent few weeks, it has slackened a bit. After the orchestrated effort of twelve IPOs in the previous week, this week's subscription shall open for two companies' IPOs. It includes IPOs of Mainboard Garuda Construction and Engineering and SME Platform company Shiva Texchem. This week, six SME companies will see the listing share activities.
