News

Published: October 5, 2023
Updated: October 5, 2023

Foreign Investors Continue to Exit Indian Equities

FIIs Sell ₹1,864 Crore Worth of Indian Stocks Despite Crude Oil Correction

In the midst of shifting global economic factors, foreign institutional investors (FIIs) have maintained their selling momentum in the Indian stock market, despite a significant correction in crude oil prices to $85 per barrel. Conversely, domestic institutional investors (DIIs) have shown renewed interest in Indian equities, pumping ₹521.41 crore into the market.

FIIs' Persistent Selling

According to data from the National Stock Exchange (NSE), FIIs have purchased ₹10,304.08 crore worth of Indian equities while selling ₹12,168.28 crore, resulting in an outflow of ₹1,864.20 crore on October 5. This ongoing trend indicates that FIIs have been net sellers of Indian stocks since the previous month.

Crude Oil and Global Influences

The selling spree by FIIs has been fueled by global factors, including soaring US Treasury yields and the almost $98 per barrel price of crude oil last week. These developments have raised concerns about high-interest rates persisting for an extended period, impacting the global economy. While there has been a decline in the dollar and US bond yields, it hasn't been significant enough to trigger a reversal in FII selling.

Crude Oil Correction

Notably, Brent crude has sharply corrected to $86 per barrel, which is seen as a positive development for the markets. However, analysts believe that the decline in the dollar and US bond yields has been mild and not substantial enough to prompt FIIs to change their selling stance.

Market Performance

The Indian stock market has seen mixed global cues recently, with the Nifty 50 and Sensex settling higher on October 5. Analysts anticipate that the Reserve Bank of India (RBI) will maintain the status quo on interest rates and monetary policy stance. All eyes will be on the RBI's assessment of inflation and growth trajectory.

Impacts and Expectations:

Despite the ongoing FII selling, there are expectations of a market recovery as global factors ease. The recent correction in crude oil prices is seen as a positive development. While uncertainty remains, sectors such as banking, IT, paints, aviation, and tyres could be influenced by the changing dynamics in the global economy and crude oil prices. Investors will be closely watching the RBI's policy decisions and macroeconomic indicators for further market direction.