BENGALURU: Foreign portfolio investors (FPIs) continued their selling streak in February, but selling moderated in the month after hitting a seven-month high in January, data from National Securities Depository shown.
FPIs offloaded Indian equities for a second consecutive month in February, selling shares worth Rs 5,294 crore.
The magnitude of the selling, however, moderated compared to January’s sale of Rs 28,852 crore worth of stocks.
Reallocation of funds to China and Taiwan and the uncertainties from a sharp selloff in Adani Group shares had intensified FPI selling in January.
Foreign investors trimmed their investments from emerging markets such as India to raise exposure to China due to attractive valuations, said independent market expert Mehraboon Irani.
The Nifty 50’s price to earnings (P/E) ratio stood at 26.31 as of March 6, compared to FTSE China A50’s 13.95 and 11.30 for Hong Kong’s Hang Seng index.
A lower relative P/E ratio indicates attractive valuations while a higher P/E implies expensive valuations.
With domestic earnings also likely to remain muted for the next few quarters due to high interest rates, foreign investors may take a while to buy Indian equities as they expect valuations to fall further, Irani added.
What foreign investors sold and bought
FPIs sold nearly Rs 5,000 crore worth of shares in the oil and gas sector in February besides turning net sellers in power and metals. Capital goods, information technology and services stocks saw renewed buying interest from FPIs.
India’s benchmark Nifty 50 fell 2% in February on sustained foreign selling, extending losses for a third month in a row.
On five similar occasions in the past, the Nifty has rebounded after three successive months of losses. But analysts warned it could be different this time around due to a prolonged high interest rate trajectory.
FPIs offloaded Indian equities for a second consecutive month in February, selling shares worth Rs 5,294 crore.
The magnitude of the selling, however, moderated compared to January’s sale of Rs 28,852 crore worth of stocks.
Reallocation of funds to China and Taiwan and the uncertainties from a sharp selloff in Adani Group shares had intensified FPI selling in January.
Foreign investors trimmed their investments from emerging markets such as India to raise exposure to China due to attractive valuations, said independent market expert Mehraboon Irani.
The Nifty 50’s price to earnings (P/E) ratio stood at 26.31 as of March 6, compared to FTSE China A50’s 13.95 and 11.30 for Hong Kong’s Hang Seng index.
A lower relative P/E ratio indicates attractive valuations while a higher P/E implies expensive valuations.
With domestic earnings also likely to remain muted for the next few quarters due to high interest rates, foreign investors may take a while to buy Indian equities as they expect valuations to fall further, Irani added.
What foreign investors sold and bought
FPIs sold nearly Rs 5,000 crore worth of shares in the oil and gas sector in February besides turning net sellers in power and metals. Capital goods, information technology and services stocks saw renewed buying interest from FPIs.
India’s benchmark Nifty 50 fell 2% in February on sustained foreign selling, extending losses for a third month in a row.
On five similar occasions in the past, the Nifty has rebounded after three successive months of losses. But analysts warned it could be different this time around due to a prolonged high interest rate trajectory.
