Worst Fortnight For Market As FPIs change tack

Mumbai: It was the second bad week for the market in a row as Nifty-50 fell 2.92 per cent after a 3.5 per cent fall last week, mostly due to US Fed's hawkish monetary policy announcement and the stand-off between US- NATO members and Russia over its plan to invade Ukraine.

The market has fallen in seven out of the last eight sessions. Sensex and Nifty-50 closed flat on Friday after a volatile session. The Sensex closed at 57200.23, down by 76 points or 0.13 per cent  while the Nifty-50 closed at 17101.95, down by 8.20 points or 0.05 per cent.

US Fed's plan to raise interest rates led to heavy selling by the foreign portfolio investors. On Friday too FPIs were net sellers by Rs 5,045.34 crore while the domestic institutions were net buyers by Rs 3358.67 crore.

January has seen FPIs selling equities worth  Rs 28,242 crore, as per national depository NSDL's data.

"FPIs have been booking profits in IT where they have been sitting on big profits after the huge appreciation in the last two years. FPI selling has depressed the stock prices of financials, particularly that of leading banks," said V.K. Vijayakumar, chief investment strategist, Geojit Financial Services.

The BSE IT Index is down 12.08 per cent from its January 172022 peak compared to the Sensex fall during the same period by 6.70 per cent from its January peak of 61308.91.

"FPIs hold large stakes in many companies we classify as growth/quality oriented stocks. As the global investment rotation takes place, in the short term, these stocks have seen significant sell offs as part of the larger global re-allocation currently taking place,” said a note by Axis Mutual Fund.