In October, foreign portfolio investors (FPIs) sold a record Rs 94,017 crore in Indian stocks, marking a significant shift from their previous four-month buying streak. This substantial outflow contributed to a decline in the benchmark indices, with the Sensex and Nifty experiencing notable losses.
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- FPIs transitioned from net buyers to net sellers in October.
- The Sensex fell from its all-time high of 85,978 points to 79,724 points.
- Investors are advised to focus on stocks with positive earnings visibility.
Foreign portfolio investors (FPIs) sold shares worth Rs 94,017 crore in India throughout October, leading to a decline in the overall performance of the stock market. This marked a significant shift, as FPIs transitioned from being net buyers for the previous four months to becoming net sellers.
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The figures released by the National Securities Depository Limited indicate that the amount sold by FPIs in October represents the highest total recorded for a single month. In contrast, during the preceding four months, 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. Their active buying during this period had previously bolstered the stock market, with indices reaching multiple new highs.
However, the recent trend has been bearish, with the benchmark Sensex experiencing a notable decline from its all-time high of 85,978 points, now trading at 79,724 points. This downturn has been largely attributed to the significant fund outflows and lower-than-expected earnings reported by Indian companies for the second quarter.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented, "This relentless selling has substantially contributed to the approximately 8 per cent drop in benchmark indices from their peak." The consistent outflow of funds has created uncertainty in the market, with many investors reassessing their positions.
On Friday evening, during the Muhurat special session, the Sensex closed 0.4 per cent higher at 79,688 points, while the Nifty ended at 24,300 points, also reflecting a gain of 0.4 per cent. This rebound came after two days of losses, with all sectoral indices opening in the green and maintaining an upward trajectory during the Muhurat Trading hour. The only exception was the Nifty IT index, which saw a marginal decline of 0.02 per cent.
Looking ahead, Vijayakumar noted, "FII selling may continue, which could further impact the benchmark indices. In such a scenario, investors should concentrate on stock-specific investments where second-quarter results have been positive and earnings visibility appears promising." As market conditions evolve, investors will need to navigate these challenges while identifying opportunities in individual stocks that show resilience and potential for growth.
(With puts from ANI)
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