FIIs emerge net sellers of debt for two days in a row

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Mumbai | Updated: March 12, 2015 5:23:14 AM

Foreign Institutional Investors (FII) have been net sellers in the debt market in the first two days of this week, for the first time in 2015.

Foreign Institutional Investors (FII) have been net sellers in the debt market in the first two days of this week, for the first time in 2015.

FIIs sold a net $200.65 million on Monday and Tuesday. FIIs have, since January, pumped in $5.8 billion into the Indian debt market. The figure had crossed $6 billion in the first week of March but sell-offs seen in the last two days have erased the gains.

A bond arranger who did not wish to be named attributed the sales to bulk redemptions of short-term commercial paper. “I do not think FIIs have sold any Indian paper exclusively due to expectations of an early rate hike led by a positive US jobs data,” said the source.

Foreign Institutional Investors, FIIs, Indian debt market, US jobs data

On Friday, the US Labor Department had posted a stronger-than-expected non-farm payroll data which indicated that unemployment had hit six-and-a-half-year low at 5.5%. This had sparked caution among investors leading to a sell-off in the emerging market assets — both in equities and bonds. The market is awaiting clarity on the US interest rate stance, which is likely to emerge after the Federal Open Market Committee (FOMC) meet mid-March.

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