Foreign portfolio investors (FPIs) remained net sellers in the Indian equity market, pulling out $163.02 million.
Indian equities started the week on Monday by shedding some of the previous week’s gains. The 30-share Sensex declined 469.6, or 1.51%, to close at 30,690.02, while the broader Nifty declined 118.05 points, or 1.30%, to close at 8,993.85, giving up the crucial 9,000-point mark.
According to market experts, extended lockdown by certain states and rise in Covid-19 cases in India made the market jittery. Foreign portfolio investors (FPIs) remained net sellers in the Indian equity market, pulling out $163.02 million.
In the last few days, the number of new Covid cases in Europe have decreased with Italy, Spain and France reporting a slowdown in their new cases. According to Bloomberg, Italy reported the fewest number of deaths in more than three weeks. Meanwhile, India currently has 9,152 cases of Covid-19. Vinod Nair, head of research, Geojit Financial Services, said: “Any continuation of the lockdown in its current form will put further pressure on economic growth and corporate earnings, and will have a negative impact on the markets.”
The F&O volumes on NSE on Monday were Rs 6.2 lakh crore and cash market volumes stood at Rs 45,819 crore. This is against the six month average of Rs 14.65 lakh crore in F&O market and `39,134 crore in the cash market on NSE.
FPIs have remained net sellers so far in April and pulled out $309.31 million from the equity markets. Domestic institutional investors (DII) also sold equities worth $143.89 million on Monday. Indian markets tracked their Asian peers with bourses in China, Taiwan and South Korea down between 0.49% and 1.88%. Hong Kong’s Hang Seng, however, played the exception, gaining 1.3% during the day’s trade. European markets were up at the time of going to press, with stock exchanges in France, Germany and the UK gaining between 1.4% and 2.24%, respectively. The rupee that had tested fresh new lows against the dollar ended the session flat, closing at 76.29 against the dollar. The depreciating rupee adversely impacts FPIs as it erodes returns. FPIs own 22% of the market capitalisation of BSE 500 companies, they are the second-largest owners after promoter shareholders. The depreciating rupee erodes the value of their stocks.
Rusmik Oza, executive vice president – head of fundamental research, Kotak Securities, said: “The depreciating rupee undermines the value of the underlying stocks, this forces a few FPIs to sell.” Brent crude was also trading at $32 per barrel after OPEC and other oil producing countries around the world decided to cut oil production.
The biggest gainers on Nifty were Larsen & Toubro, Hindalco, Bharti Airtel, Adani Ports & SEZ, as well as Dr Reddy’s Laboratories, up by 6.3%, 6%, 4.46%, 4.41% and 3.8%, respectively. L&T was the biggest gainer in the session closing at Rs 864.4 a piece after the infrastructure giant bagged new orders. On the other hand, the biggest losers were Bajaj Finance, Zee Entertainment, Bajaj Finserv, Mahindra & Mahindra as well as Titan down by 10.26%, 8.4%, 6.8%, 4.9%, and 4.6%. The HDFC twins, ICICI Bank, Bajaj Finance and Reliance Industries were responsible for dragging the index down. Sectorally, Nifty Realty, Nifty Media, Nifty Financial Services, and Nifty Auto. Nifty Bank was down by 2.14% ending the day at 19,488. Nifty Pharma and Nifty Metal were the only sectoral gainers on Monday.