Foreign Institutional Investors (FII?s) sell off was one of the major contributions to cause the BSE Sensex post its fourth greatest fall on Friday. According to provisional data available from the Stock Exchanges (SE?s) FII?s were net sellers of Rs 2,146.92 crore on Friday while the Domestic Institutional Investors (DII?s) were net buyers to the tune of Rs695.56 crore on Friday.
Segments of the market believe that the ongoing sub prime issue, which has forced major banks to write-off their loses due to exposure to the credit market in the US, and which also form a major chunk of FII?s, are withdrawing money to shore up their balance sheets. Another segment reckons that FII?s are booking profit at higher levels and rationalising their portfolios and moving into defensive stocks like cement and pharma from over-heated stocks.
However, Ambreesh Baliga, VP, Karvy Stock broking avers, ?I think the P-notes issue is coming back in the picture as we have not seen FII?s taking any fresh positions for some time now and coupled with this even the sub-prime issue is forcing the FII?s to book profit at higher levels. However I don?t think the Indian markets are over-heated and we might see them staging a coming back as Indian markets are doing better than many global peers?.
Overall, FII?s have withdrawn Rs4,065.8 crore in the last four trading days in the equity segment and Rs118.2 crore in the debt segment. That takes the count of FII?s in the month of January till yesterday as net sellers of Rs1,405.80 crore in the equity segment and net buyers of Rs1,796 crore in the debt segment. While the Mutual Funds (MF) were net buyers of Rs14,322.899 crore in the equities and Rs18,652.4 crore in the debt segment.
The negative sentiment of the FII?s is can also be judged by the fact that they were net sellers in the derivatives segment to the tune of Rs 6,692.76 crore in the last four trading sessions.
