FPI Sales Intensify to Rs 15,000 Crore So Far in January: Here’s Why, Outlook?

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By Malvika Gurung

Investing.com — In the first two weeks of the new year, foreign investors managed to make a net write-down of Rs 15,000 crore on Indian equities amid risks of Covid, US recession concerns , foreign investors chasing lower valuations by selling in overvalued markets such as India.

According to NSDL data, FPI sold domestic shares worth Rs 15,068 crore from Jan 2-13, with only two trading days witnessing net purchases in the period. The January sell-off comes after two consecutive months of FIIs becoming net buyers, with net inflows of Rs 11,119 crore in December and Rs 36,239 crore in November 2022.

In a note to Investing.com, Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, quoted that FIIs continued their selling for the 16th consecutive trading session on Friday, bringing the total figure to Rs 23,887 crore.

“FIIs are selling in India and moving money to cheaper markets like China, Hong Kong and South Korea where valuations are much lower. In 2022, FIIs sold in China. This trend has changed to long China and short India,” said Vijayakumar.

He sees the trend continuing for a few more days, adding that since DIIs and retail investors are buyers and eager to buy into the dips, the FII sales are unlikely to lead to a sharp correction in the market, even though the market seems weak in the short term.

Kotak Securities’ Shrikant Chouhan expects FPI flows to remain volatile going forward, despite inflation continuing to fall both globally and domestically.

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