After six consecutive months of net positive inflows, foreign portfolio investors (FPIs) turned net sellers of Indian stocks in April.

Yet, the pressure on the markets this calendar year has not been because of the FPIs, which still remain net buyers of stocks, by because of the selling by domestic institutional investors (DIIs), data show.

The Sensex and the Nifty have declined 8 per cent from their all-time highs in February. The heightened fear over the Covid-19 second wave in April is making investors nervous, analysts said.

Gaurav Dua, Senior Vice-President and Head, Capital Market Strategy, Sharekhan BNP Paribas, told BusinessLine : “There has been generally a slowdown in foreign inflows into emerging markets. Particularly in the case of India, the intense second wave of coronavirus and its fallout on the economy have led to some selling pressure by foreign institutions.”

Dua expects some knee-jerk reactions in the market as the Assembly election results come in but overall the positive outlook for inflows remained. According to exchange data, FPIs sold stocks worth ₹9,659 crore or close to $1.3 billion in April, turning net sellers for the first time since September 2020. Then, FPIs had sold stocks worth ₹7,783 crore, after four months of being net buyers.

Net buyers

So far in 2021, FPIs are net buyers of stocks, worth ₹46,083 crore or more than $6.14 billion. In contrast, the DIIs, comprising insurance companies and mutual funds, were net sellers of stocks worth ₹13,454 crore or $1.8 billion between January and April.

Though, when the FPIs were selling in April, DIIs did come to the support of the market and made net purchases worth more than ₹11,000 crore in just one month.

Related Topics
comment COMMENT NOW