Foreign Investors Sell Indian Stocks Worth Rs 21,201 Crore in August, Domestic Investors Step In
Foreign investors have been selling a significant amount of Indian equities, totaling Rs 21,201 crore in August. This has turned their net investment for the month negative. From August 12 to 17 alone, they sold equities worth Rs 7,769.73 crore.
According to the National Securities Depository Limited, foreign investors have sold Rs 32,684 crore worth of equities through stock exchanges. However, they also invested Rs 11,483 crore through the primary market and other categories, indicating selective investment opportunities.
Market experts, including V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attribute this trend to the high valuation of Indian stocks, which are among the most expensive in the world. Vijayakumar stated, “This trend is likely to continue since India is the most expensive market in the world now, and it is rational for FPIs to sell here and move the money to cheaper markets.”
Despite the selling by foreign investors, domestic institutional investors have remained net buyers, purchasing Rs 34,060.09 crore worth of equities in August, according to NSE data. This has largely compensated for the outflows by foreign investors.
Doubts Revealed
Foreign Investors -: Foreign investors are people or companies from other countries who invest money in another country’s businesses or stocks.
Rs 21,201 Crore -: Rs 21,201 crore is a large amount of money. One crore is equal to 10 million, so 21,201 crore is 212,010 million rupees.
Indian equities -: Indian equities are shares or stocks of companies that are based in India. When you buy a share, you own a small part of that company.
Net investment negative -: Net investment negative means that the total amount of money invested is less than the amount of money taken out. In this case, foreign investors took out more money than they put in.
Primary market -: The primary market is where new stocks or shares are sold for the first time. It’s like buying a brand-new toy directly from the factory.
High valuations -: High valuations mean that the prices of the stocks are very high. It’s like when a toy is very expensive because many people want to buy it.
Domestic institutional investors -: Domestic institutional investors are big organizations within India, like banks or insurance companies, that invest large amounts of money in stocks.
Compensated for the outflows -: Compensated for the outflows means that the domestic investors bought enough stocks to make up for the ones that the foreign investors sold.
