FPIs sell Rs 1-L cr equities in 2022

Mumbai: Heavy outflow from the equity market continued on Tuesday despite market gains after four days of losess as foreign portfolio investors have been selling equities worth approximately $1 billion per day in March.

The Sensex gained 581.34 points or 1.10 per cent to close at 53424.09 but the provisional data showed FPIs as net sellers of equities worth Rs 8,142.60 crore on Tuesday.

Over Rs 1 lakh crore worth of equities have been sold by the foreign portfolio investors year-to- date in what seems to be profit booking ahead of the US Fed interest rate hike which may be announced after the scheduled  March 15-16 meeting of the US Federal Reserve.

As on March 8, FPIs were net sellers of equities worth Rs 99,036 crore as per NSDL data while provisional data for March 8 showed FPIs selling equities worth Rs 8,142.60 crore on Tuesday,  the highest one-day figure this month.

In the current year, in the three months of January (-Rs 33,303 crore), February (-Rs 35,592 crore) and March (-Rs 30,141 crore) FPIs have sold equities worth over 30,000 crore each month, far more than the last quarter of calendar year 2021. However, the selling has intensified this month to even a higher degree as it's still early March.

Depreciation of the rupee to an all-time low versus US dollar seems to be another factor that has accelerated selling by foreign investors.

"In spite of a correction of around 17 per cent from the peak in Sesnex and Nifty, the FPIs continue to sell since market sentiments have been impacted globally by the uncertainty triggered by the war and the surge in crude," said V. K. Vijayakumar, chief investment strategist, Geojit Financial Services.

"In February FPI selling was matched by domestic institutional investors (DIIs) buying, preventing a major crash in the market," Vijayakumar said.
"Large FPI-holding sectors like Banking, IT are seeing consistent selling pressure," said  Siddhartha Khemka, head - retail research, Motilal Oswal Financial Services.