Foreign Investors Sell Record Stocks in India
In October, foreign portfolio investors (FPIs) became net sellers in the Indian stock markets after four months of being net buyers. They sold stocks worth Rs 94,017 crore, marking the highest-ever monthly sale, according to the National Securities Depository Limited. Previously, FPIs had purchased stocks worth Rs 26,565 crore in June, Rs 32,365 crore in July, Rs 7,320 crore in August, and Rs 57,724 crore in September.
The Sensex, which had reached an all-time high of 85,978 points, fell to 79,389 points. The recent bearish trend in the stock market is due to fund outflows and lower-than-expected Q2 earnings of Indian companies. On a recent Thursday, the Sensex closed at 79,389.06 points, down by 553.12 points or 0.69%, while the Nifty ended at 24,205.35 points, down by 135.50 points or 0.56%.
Vinod Nair, Head of Research at Geojit Financial Services, mentioned that the market might continue to consolidate in the short term. A trend reversal could depend on a slowdown in foreign investor selling and the outcome of the US presidential election.
Despite the foreign sell-off, domestic institutional investors remained net buyers, purchasing stocks worth thousands of crores more than FPIs in October. This helped cushion the stock indices from a sharper decline. The recent gains in the indices over the past three months were driven by strong GDP growth, controlled inflation, strong domestic liquidity, and favorable monsoon conditions. FPI activity in June and July was influenced by smooth election results and the formation of a new government.
Doubts Revealed
Foreign Investors -: Foreign investors are people or companies from other countries who invest money in India. They buy stocks or shares in Indian companies to make a profit.
FPIs -: FPIs stands for Foreign Portfolio Investors. These are investors from other countries who invest in financial assets like stocks and bonds in India.
Sensex -: Sensex is a stock market index in India. It shows how the stocks of 30 major companies listed on the Bombay Stock Exchange (BSE) are performing.
Rs 94,017 crore -: Rs 94,017 crore is a large amount of money. In India, ‘crore’ is a unit equal to ten million, so this amount is 940.17 billion rupees.
Bearish market -: A bearish market is when stock prices are falling, and investors feel pessimistic about the future. It means people are selling more stocks than buying.
Q2 earnings -: Q2 earnings refer to the profits or losses a company reports for the second quarter of the financial year. It helps investors understand how well a company is doing.
Domestic investors -: Domestic investors are people or companies from within India who invest in Indian stocks and financial assets.
US presidential election -: The US presidential election is when people in the United States vote to choose their President. The outcome can affect global markets, including India’s.