FPI Selling : In Details . Shares Worth Rs 21,201 Crore sold so far In August, Foreign Investors continue Selling

In the month of August, the Indian market has been affected by many reasons including the possibility of recession in the global market, due to which foreign investors continued to sell in the equity market this month. In fact, due to the closure of Japan's Yen carry trade, recession in America and ongoing geo-political tensions, foreign investors have sold shares worth Rs 21,201 crore so far in the month of August.

Foreign investors have continued to sell in the Indian stock markets in August. They have sold shares worth Rs 21,101 crore so far. The reason for this is the closure of 'carry trade' in Yen currency i.e. investing in assets of another country by taking loan from a country with low interest rate, fear of recession in America and increasing tension at the global level.

According to the data of the depository, FIIs bought shares worth Rs 32,365 crore in July and Rs 26,565 crore in June. Foreign portfolio investors (FPIs) invested in these two months in the hope of continued economic growth, continued reforms, quarterly results of companies being better than expected and stability at the political level.

Earlier, FPIs had withdrawn Rs 25,586 crore in May during the Lok Sabha elections and more than Rs 8,700 crore in April amid concerns over changes in India's tax agreement with Mauritius and the continued rise in US bond yields. According to the data, FPIs have withdrawn Rs 21,201 crore from the stock market so far this month (August 1-17). According to depository data, FPIs have invested Rs 14,364 crore in equity shares so far this year.

The main reason for FPI withdrawal in August is global and domestic factors. Vipul Bhowar, Director, Listed Investments at Waterfield Advisors, said, "Globally, the end of yen carry trade, fears of global recession, slow economic growth and concerns over ongoing conflicts globally have led to volatility and risk aversion in the market.

Himanshu Srivastava, Associate Director, Morningstar Investment Research India, said that the announcement of a hike in capital gains tax on equity investments after the budget has accelerated the sell-off. He said that apart from this, amid weak jobs data in the US, uncertainty over the timing of policy rate cuts and the end of the yen 'carry trade', FPIs are cautious about the high valuation of Indian stocks and concerns about the global economy.

According to NSDL data, the total investment of FPIs in equity markets in the calendar year 2024 so far has come down to Rs 14365 crore. However, FPI investment continues in domestic debt or bond markets. As of August 16, FPIs have invested Rs 9112 crore in the debt markets. With this, the total investment of FPIs in debt markets has crossed Rs one lakh crore.

Foreign investors have continued selling in the Indian stock markets in August. They have sold shares worth Rs 21,101 crore so far. The reason for this is the closure of 'carry trade' in Yen currency i.e. borrowing from a country with low interest rate and investing in the assets of another country, fear of recession in America and increasing tension at the global level. According to the data of the depository, FIIs bought shares worth Rs 32,365 crore in July and Rs 26,565 crore in June. Foreign portfolio investors (FPIs) invested in these two months in the hope of continued economic growth, continued reforms, quarterly results of companies being better than expected and stability at the political level.

FPIs withdrew Rs 21,201 crore from equity till August 16

JNN, New Delhi. Foreign portfolio investors (FPIs) continue to withdraw from equity markets in August. According to data from National Securities Depository Limited (NSDL), FPIs have withdrawn Rs 21,201 crore from equity markets till August 16. Earlier in July and June, FPIs had made net investments of Rs 32,365 crore and Rs 26,565 crore respectively in equity.

FPI investment in debt markets crosses Rs 1 lakh crore in 2024

According to NSDL data, the total investment of FPIs in equity markets has declined to Rs 14,365 crore so far in the calendar year 2024. However, FPI investment in domestic debt or bond markets continues. As of August 16, FPIs have invested Rs 9,112 crore in the debt markets. With this, the total investment of FPIs in the debt markets has crossed Rs 1 lakh crore. FPIs had earlier invested Rs 22,363 crore in the debt markets in July.

Changes in Mauritius tax treaty also have an impact

Earlier, FPIs had withdrawn Rs 25,586 crore in May during the Lok Sabha elections and more than Rs 8,700 crore in April amid concerns over changes in India's tax treaty with Mauritius and the continuous rise in US bond yields. According to the data, FPIs have withdrawn Rs 21,201 crore from the stock market so far this month (1-17 August). According to depository data, FPIs have invested Rs 14,364 crore in equity shares so far this year.

There is also talk of a slowdown in the global economy

The main reason for FPI withdrawal in August is global and domestic factors. Vipul Bhowar, Director, Listed Investments, Waterfield Advisors, said, "Globally, the end of the yen carry trade, fears of global recession, slow economic growth and concerns about ongoing conflicts globally have led to volatility and risk aversion in the market.

Selling got support due to capital gains tax

Himanshu Srivastava, Associate Director, Morningstar Investment Research India, said that the announcement of increase in capital gains tax on equity investments after the budget has accelerated the selling. Besides, amid weak US jobs data, uncertainty over the timing of rate cuts and the end of Yen 'carry trade', FPIs are cautious about the high valuation of Indian stocks and concerns over the global economy, he said.

There is a risk of instability and risk in the market

Vipul Bhowar, Director of Listed Investments at Waterfield Advisors, said that at present there is a risk of instability and risk in the market due to yen carry trade, global recession, slowing economic growth and increasing global tensions. Bhowar further said that after making net purchases in June and July, FPIs are now selling. At the same time, mixed quarterly results and high valuations have made the Indian market less attractive.

Valuations low in primary market

The primary market is still trading at low valuations. At the same time, valuations in the secondary are currently high. For this reason, FPIs are buying in the primary markets, where valuations are cheap and selling in the secondary markets. In the last 12 months, FPIs have invested Rs 64,824 crore in the Indian markets. According to the data, during this period, FPIs have invested a total of Rs 1,82,965 crore and have sold a total of Rs 1,18,141 crore.

Foreign investment had increased in June and July

According to the data of the depository, this withdrawal has happened after an investment of Rs 32,365 crore in the month of July and Rs 26,565 crore in June. Foreign Portfolio Investors (FPIs) had invested in June and July 2024 in the hope of continued economy development, continued reform measures, better than expected earnings season and political stability.

Withdrawal was done during the Lok Sabha elections

Let us tell you that earlier in May, during the Lok Sabha elections 2024 in India, FPIs sold shares worth Rs 25,586 crore due to electoral uncertainties, while in April, Rs 8,700 crore was withdrawn due to concerns about changes in India's tax agreement with Mauritius and the continuous increase in US bond yields.

Investment of Rs 14,364 crore in 2024

According to data from depositories, FPIs have bought shares worth Rs 14,364 crore in the Indian market so far in the year 2024. The withdrawal made by FPIs in August was mainly driven by a combination of global and domestic factors. Vipul Bhowar, listed investor director, Waterfield Advisors, said, "Globally, concerns about the closure of the yen carry trade, a possible global recession, slowing economic growth and ongoing geopolitical conflicts fueled volatility and risk aversion in the market.

Possibility of further increase in selling

According to the data of National Securities Depository Limited (NSDL), till August 16, foreign portfolio investors sold shares worth Rs 21,201 crore in the Indian market. There are still two full weeks left in the month of August. If this pace of FPI selling continues till the end, then the figure may increase significantly by the end of August.

Possibility of further increase in selling

According to the data of National Securities Depository Limited (NSDL), till August 16, foreign portfolio investors sold shares worth Rs 21,201 crore in the Indian market. There are still two full weeks left in the month of August. If this pace of FPI selling continues till the end, then the figure may increase significantly by the end of August.

Risk of full year figures going negative

Due to the selling done so far in the month of August, there is a danger of the full year figure going negative. After the selling till half of August, FPI investors are now left with only Rs 14,365 crore for the whole of 2024.

Were buying shares in June and July

Earlier in the month of July, foreign portfolio investors had bought Indian shares worth Rs 32,365 crore. At the same time, in the month of June, FPIs had bought Indian shares worth Rs 25,565 crore. Foreign portfolio investors started buying Indian shares in mid-June after a long sell-off. After about one and a half months of buying, they have again become sellers.

Year and financial year started with selling

FPIs started this financial year with selling. They sold Indian shares worth Rs 8,671 crore in the first month of the financial year, April, and then Rs 25,586 crore in the month of May. In the first month of the year, January 2024, FPIs were sellers of Rs 25,744 crore. However, after that FPIs bought shares worth Rs 1,539 crore in February and Rs 35,098 crore in March.

Were buying shares in June and July

Earlier in the month of July, foreign portfolio investors had bought Indian shares worth Rs 32,365 crore. At the same time, in the month of June, FPIs had bought Indian shares worth Rs 25,565 crore. Foreign portfolio investors started buying Indian shares in mid-June after a long sell-off. After about one and a half months of buying, they have again become sellers.