The total sales by FPIs (Foreign Portfolio Investors) so far in October have been Rs 53,337 crore. However, during this period FPIs have invested Rs 5,281 crore in the Indian IPO market.
Dr. V.K., Chief Investment Strategist, Geojit Investments Limited. “The total selling by FPIs through exchanges this year stood at Rs 3,69,164 crore,” Vijayakumar said.
On the investment inflow front, FPIs remained net sellers for the 10th consecutive week. In the week ending October 23, FPIs reduced their selling significantly and even became buyers on two days.
Softening in US bond yields (10-year yield falling from 5.36 per cent to around 5 per cent), rupee strengthening to 94.94 against the dollar, and low valuations, especially of large-cap stocks – all these factors have helped in reducing the selling by FPIs.
Going forward, a sustained decline in FII selling is a bit of a solace, although higher crude prices and widespread weakness in the broader market still pose downside risks. An important trend of the market this week was the huge fall in mid-cap and small-cap stocks.
This week, Nifty Mid-Cap 100 fell by 5.6 percent and Nifty Small-Cap 100 fell by 7.3 percent, while Nifty 50 showed better strength and recorded a fall of only 2.35 percent.
Experts believe that one reason for this decline in the broader market could be 'forced liquidation' of margin-funded long positions.
The main reason for the strength of large-cap stocks is the purchase of these stocks by DIIs (domestic institutional investors), who have a lot of funds available for investment. According to experts, high prices of crude oil remain a major obstacle for the economy and the market.