FII selling nears Rs 16,000 crore in five days: This factor apart from US bond yields helping bears on Dalal Street
FII selling nears Rs 16,000 crore in five days: This factor apart from US bond yields helping bears on Dalal Street
Foreign institutional investors (FIIs) have turned net sellers in the last five trading sessions of this month. The selling by FIIs has touched Rs 15,863 crore in May, keeping market participants guessing for how long will the stake sale continue. On the other hand, domestic institutional investors (DIIs) bought securities worth Rs 11,057 crore in May, mitigating the effect of FII stake sale in the Indian equity market.
The sell-off by foreign investors intensified on May 8 (Wednesday) with sale of equities worth Rs 669.10 crore. DIIs were not too far behind with buying of securities worth Rs 5,929 crore in the cash market.
In April 2024 too, FIIs offloaded securities worth Rs 35,692 crore against buying of securities worth Rs 44,186 crore in the same period, according to NSE data.
FIIs have been net sellers in three out of four months this year. In March 2024, they turned net buyers with purchase of securities worth Rs 3314.47 crore in the cash market.
Decoding the key factor behind FII selling, VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, “A major trend in the market now is the aggressive selling by FIIs. Though DIIs are buying they are not as aggressive as they were due to some concerns surrounding election results. It is important to understand that there is a new factor triggering FII selling, apart from the high US bond yields.
This is the outperformance of the Chinese and Hong Kong markets. During the last one month while Nifty is down 1.5%, the Shanghai Composite is up by 2.62% and Hang Seng is up by a whopping 8.8%. Chinese and Hong Kong markets are cheap with PEs around 10 while India is expensive with double the PE of these markets. So long, as this outperformance of the Chinese and Hong Kong market continues, FIIs are likely to sell. The weakness in frontline financials is primarily due to FII selling.”
Of six trading sessions in May, market has ended higher only in two sessions, that too with marginal gains. In the current session, Sensex plunged over 1,000 pts to 72,389 and Nifty was down 361 pts to 21,941. Investors lost around Rs 7.6 lakh crore on BSE today. All sectoral indices were down with capital goods shares leading losses on Dalal Street.
Watch Live TV in English
Watch Live TV in Hindi