FPIs outflow is close to ₹2 lakh cr from stocks in less than six months of 2022. When will the worst be over
Foreign investors (FPI) continued to be net sellers in the Indian market. As of today, the outflow of money has been almost 20,000 crore on the Indian stock exchange in less than six months of this year. Selling pressure from FPI in the domestic stock market is expected to continue in the near-term, especially as inflation remains at multi-year highs and above the RBI comfort zone is forced to raise interest rates. even stronger.
NSDL data shows that, from the beginning of this month to June 17, FPI Outflow stands at 31,430 crore on the stock market. While, so far in 2022 until today, the outflow has increased 1,98,585 crore in domestic equity.
NSDL data is aggregated based on reports submitted by the Custodian to SEBI/Depositories and constitutes transactions executed by FPI on and up to the previous transaction day(s).
However, data from Dr VK Vijayakumar, Head of Investment Strategy at Geojit Financial Services indicates that in the current year 2022 to June 17, FPI has sold equity to the tune of 2,02,244 crore.
In May of this year, the flow of FPIs stood at 39,993 crore, and in April the outflow was at 17,144 crore, according to NSDL data.
That said, so far in the first quarter of fiscal year 23 through June 17, FPIs have generated a large amount of 88,567 crore from the stock market.
So far this year, NSDL data continues to show that the peak of the sell-off was in March in the phase of 41,123 crore, while the outflow is 35,592 crore and 33,303 crore in February and January respectively. During the period from January to March, the total outflow is about 1.10.018 crore.
In general, the total outflow of FPIs including stocks, debt, debt-VRR and mixed market, stood at 2,08,587 crore.
Vijayakumar said, “FPI sold a lot in other emerging markets like Taiwan and Korea. A strong dollar and rising bond yields in the US were the main reasons for the selling of FPI. Ever since the Fed and other central banks such as Bank of England and Central Bank of Switzerland have raised rates, globally there are synchronized rate hikes, with yields rising. In India, FPI continues to sell in the financial and IT sectors, where they hold the most.”
Earlier today, Vijayakumar also said, “The main theme affecting the stock markets globally is the synchronized global monetary tightening and consequent recession fears. The possibility of the US falling into the current recession is much higher Markets are easing these concerns S&P 500 PE is currently around 16, close to the long-term average Europe is trading at around 11x the market will bottom out sooner than the economy.”
In India, valuations have fallen, but are even higher than the long-term average, according to Geojit chief investment strategist. So, FPI will continue to sell, limiting a possible drop in price at any time.
