Foreign Portfolio Investors (FPIs) have sold Indian equities worth close to $485 million in September, after offloading stocks worth nearly $2 billion in August. On Friday foreign investors bought shares worth $65 million, provisional data on exchanges showed. The net investments are at $6.4 billion so far this year.
Sensex at the present levels of 32,272.61 trades at a price-earnings multiple of over 18.84 times one-year estimated forward earnings, a 20% premium to the long-term average multiple.
Concerns over steep valuations and poor corporate earnings for the June quarter have seen investors take risk off the table. Earnings estimates for FY18 are being trimmed with almost every sector having seen a downgrade.
The tepid growth in GDP for the June quarter, of just 5.7% year-on-year has seen economists cutting their growth forecasts for the year.
Among the emerging markets (EMs), India has witnessed the highest outflows in September, followed by Taiwan which has seen an outflow of $705 million. FPI sales in Indonesia was at $617 million and $521 million in South Korea.