Foreign Institutional Investors continue to remain net sellers in the Indian equity market, selling shares worth over Rs 10,000 crore during the last 10 trading sessions.
According to data available, Foreign Investors have sold shares worth Rs 11,379 crore starting December 23.
This marks a continuation from 2022, when overall FPI outflow stood at over Rs 1.2 lakh crore. One of the main triggers for the selling pressure in 2022 was a depreciating currency and rising interest rates in the US.
Persistent selling from foreign investors has resulted in the Nifty 50 index correcting over 1,000 points from its record high on December 1.
| Date | FII flow | DII flow |
| January 5 | -1,449.45 crore | -194.09 crore |
| January 4 | -2,620.89 crore | 773.58 crore |
| January 3 | -628.07 crore | 350.57 crore |
| January 2 | -212.57 crore | 743.35 crore |
| December 30 | -2,950.89 crore | 2,266.20 crore |
| December 29 | -572.78 crore | 515.83 crore |
| December 28 | -872.59 crore | 372.87 crore |
| December 27 | -867.65 crore | 621.81 crore |
| December 26 | -497.65 crore | 1,285.74 crore |
| December 23 | -706.84 crore | 3,398.98 crore |
On the other hand, Domestic Institutional Investors (DIIs) have been net buyers for the last nine sessions, before selling shares worth Rs 200 crore on Thursday, putting an end to the nine-day run. Since December 23, DIIs have purchased stock worth Rs 10,134 crore.
Over the last seven years, foreign investors have invested $30.4 billion in the Indian market, with only two years of outflows. On the other hand, DIIs have invested over $80.5 billion with over $32.2 billion invested in 2022 alone, according to data from Motilal Oswal.
Continuous foreign fund outflows added to the selling pressure, market participants said.
Rupen Rajguru of Julius Baer says that if not $30 billion, domestic flows in 2023 can be within the $20 billion range, by purely adding passive money through insurance companies, provident fund and the SIP book.
The Indian market has witnessed some outflows due to valuation concerns and other attractive opportunities being presented within the Emerging Market basket. Rajguru believes that global investors may turn bullish on China simply because of the undervaluation. However, India will also be a beneficiary, in case flows return to Emerging Markets.
Rajguru's sentiments on China were also echoed by Timothy Moe of Goldman Sachs, who featured on CNBC-TV18 last month. He was of the opinion that although India's long-term strategic prospects are the best, if not among the best, 2023 will be a challenging year for investors looking for outsized profits.
Moe finds valuations in China and South Korea to be more compelling. China trades at 10 times forward earnings, with headroom for faster earnings growth as well.
On the other hand, Nilesh Shetty of Quantum Advisors believes that India will get a lot more flows as global investors, who allocated to China, do not want to allocate more due to political developments there. As a result, the only other emerging market where flows can come is India. "The way India is positioned globally, relative to the rest of the EMs, which are going through some of your own problems, makes a very sharp case for more flows coming into India internationally," he said on CNBC-TV18.
First Published: Jan 6, 2023 8:29 AM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
