Foreign portfolio investors (FPI) have been on a selling spree starting February 5, netting sales of $1.35 billion over the past 11 sessions. Market participants cited the global sell-off and problems in PSU banks as reasons for the sell-off. After adjusting for net purchases in the first two sessions of the month at $394 million, the net sales in February so far stand at near $1 billion. If the trend continues, February would see FPIs emerge as net sellers after emerging net buyers in January. FPIs have net bought in three months out of the past 4 months. “There are a lot of developments in India which are not positive. This is coinciding with the risk-off trade in the early parts of February. Other markets have recovered, but we have not recovered that much,” said Andrew Holland, CEO, Avendus Capital Alternate Strategies. When asked about his outlook for the market he said, “Last year we didn’t seen any volatility at all. The bull market complacency is probably over for some time. I expect more volatility.”
Another market participant said that a few funds could have shifted some of their exposure from India to China.“There has been some amount of volatility and weakness across markets, and when that happens some amount of outflows happen from every market. As it is we are seeing equity weakness all around us particularly in the last month,” he added. The net investments of FPIs in India have been $1.01 billion, so far, this year.
Foreign Portfolio Investors (FPIs) on Tuesday sold equities worth $131.24 million, provisional data on exchanges showed. The benchmark Sensex at current levels of 33,703.59, trades at a price-earnings multiple of over 18 times one-year estimated forward earnings. Among the other emerging markets (EMs) too have witnessed outflows this month, Taiwan saw outflows of $3.5 billion, followed by South Korea ($2.49 billion) and Indonesia ($622 million).