After offloading equities worth $1.9 billion in August, Foreign Portfolio Investors (FPIs) sold shares worth $130 million on the first day of September, provisional data on exchanges showed. Market participants said concerns over steep valuations and tepid growth in the recently concluded results season are the reasons behind this trend. The selling in August is the highest monthly outflow since November 2016. In November 2016, FPIs sold equities worth $2.6 billion. The net investments are at $ 6.7 billion so far this year. Barring six, overseas investors remained net sellers in all sessions in August. Market participants said that there is a state of exhaustion amongst investors and the selling could be an attempt to take some money off the table.
Market participants said that there is a state of exhaustion amongst investors and the selling could be an attempt to take some money off the table.
The benchmark Sensex at current levels of 31,892.23, trades at a price-earnings multiple of over 18.75 times one-year estimated forward earnings, a 20% premium to the long-term average multiple. Among the emerging markets (EMs), India witnessed highest outflow in August, followed by South Korea which saw an outflow of $ 1.41 billion during the month. FPI sales in Indonesia and Taiwan are relatively smaller, where foreign investors sold $ 468 million and $ 298 million respectively.