- The Indian stock market is witnessing a sharp correction with the benchmark Nifty 50 falling nearly 3% from its record high level.
- Foreign portfolio investors (FPIs) have turned net sellers in the Indian equities this year, with significant selling in IT services, financials, and FMCG shares.
- Despite the selling, FPIs continue to invest in the Telecommunications and Capital Goods sectors.
Amid weak global cues and ongoing Lok Sabha Elections, the Indian stock market sees a sharp correction with FPIs turning net sellers in the Indian equities.
Sharp Correction in Indian Stock Market
The benchmark Nifty 50 has fallen nearly 3% from its record high level due to weak global market cues, cautiousness amid ongoing Lok Sabha Elections, in-line corporate earnings for the March quarter, and sustained outflow of foreign funds. The foreign portfolio investors (FPIs) have turned net sellers in the Indian equities this year, with net selling worth more than ₹8,600 crore in the month of April and ₹5,076 crore in May so far.
FPIs Turn Net Sellers in Indian Equities
After heavy buying in March, FPIs have turned net sellers in Indian equities. The selling was concentrated in IT services, financials, and FMCG shares last month. In the second fortnight of April, FPIs sold ₹4,915 crore worth shares in the IT sector, followed by the Financials sector which saw heavy FPI selling worth ₹9,338 crore. FMCG and Oil & Gas sectors also witnessed robust FPI selling.
FPIs Continue Buying in Telecommunications and Capital Goods Sectors
Despite the selling trend, overseas investors continued their buying momentum in Telecommunications and Capital Goods sectors in the second half of April. FPI investment in India’s telecom sector stood at ₹8,278 crore in April. The Power sector saw FPI outflows worth ₹834 in the second half of the month after witnessing strong buying to the tune of ₹5,143 crore between April 1-15. The Automobile and Auto Components sector saw FPI buying to the tune of ₹1,119 crore in April.
Conclusion
The Indian stock market is currently experiencing a sharp correction, with FPIs turning net sellers in the Indian equities. However, certain sectors like Telecommunications and Capital Goods continue to attract FPI investment. This trend indicates a cautious approach by foreign investors amid the ongoing political and economic developments in the country.
