FPIs continued the trends in June from May and April, in which they sold shares worth Rs 34,257 crore, even as the domestic institutional investors came to the rescue of the markets and remained on the buying side.
On Friday, foreign portfolio investors/FIIs were net buyers though, purchasing shares worth Rs 4,391.02 crore while the domestic institutional investors (DIIs) sold shares worth Rs 1,289.75 crore.
“In the cash market the selling has been excessive and sustained. For CY2024, so far, FPIs have sold equity for Rs 23,363 crore. A significant trend in the FPI activity is the huge selling through exchanges and buying through the primary market route,” V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said.
In his view, the FPIs are regarding Indian valuations to be very high and therefore capital has been shifting to cheaper markets. “The FPI pessimism regarding Chinese stocks appears to be over and there is a trend of investing in Chinese stocks listed on the Hong Kong Exchange since the valuations of Chinese stocks have turned very attractive,” he opined.After a June 4 shocker on the back of unexpected election results which did not give a full majority to the Bharatiya Janata Party (BJP), the markets rebounded smartly with Nifty ending with weekly gains of 3.6%. The recovery was led by IT and financial stocks. The former was up nearly 8.6% on a weekly basis while Nifty Bank gained 1.67%. “After the huge volatility witnessed in the market in response to the election results ( both exit polls and actual results) the market is slowly stabilising. An important point to consider is the high valuations of Indian stocks, particularly in the broader market. High valuations will attract further selling by FPIs, going forward,” he added. In March and February, FPIs were net buyers at Rs 35,098 crore and Rs 1,539 crore, respectively, after selling shares worth Rs 25,744 crore in January. On the net basis, they are sellers at Rs 19,824 crore, so far in this year.
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