February 18, 2024
Foreign Portfolio Investors Lead to Nifty 50 Downturn
Finance Stock Markets

Foreign Portfolio Investors Lead to Nifty 50 Downturn

Foreign Portfolio Investors Lead to Nifty 50 Downturn

Foreign Portfolio Investors Lead to Nifty 50 Downturn

The Nifty 50, comprising top blue-chip companies, is facing a notable decline over the past six trading sessions, primarily influenced by significant selling in heavyweight sectors, particularly banking. The weak performance of major banks in Q3 has triggered a sharp drop in their share prices. Adding to the pressure, foreign portfolio investors (FPIs) have actively withdrawn over ₹28,000 crore from Indian markets in the last five sessions.

Multiple Catalysts Drive Selling Spree

The selling spree by FPIs can be attributed to various factors, including the surge in US bond yields, concerns over geopolitical tensions in the Red Sea, and the prevailing trend of weak corporate earnings in Q3. These factors have prompted FPIs to book profits, impacting the overall sentiment in the market.

Nifty 50’s Performance in January

In the current month, the Nifty 50 has experienced a 2.27% erosion in value. From its all-time high of ₹22,115 points, the index has witnessed a 4% decline. A remarkable surge of 7.94% in December 2023 marked its most significant December gain since 2003. However, the recent downturn has led the index to slip below the 21,200 level, reaching a low of 21,192 points in the current year.

CLSA Highlights India as the Most Expensive Large Market

In the second week of January, CLSA stated that India has become the most expensive large market globally. This assessment has raised concerns about potential impacts on returns for the year 2024, considering the relative expensiveness of Indian stocks on a global scale.

Stocks Registering Downturn

Out of the 50 stocks in the Nifty 50, 28, accounting for 56%, have yielded negative returns in the current month. Notably, 60% of stocks have registered a downturn, with eight stocks losing more than 10% of their value. HDFC Bank’s weak performance, with a 14% weightage in the Nifty 50, has significantly contributed to the broader market decline.

Worst Performers in January

HDFC Bank, Eicher Motors, Hindalco, and Hindustan Unilever (HUL) are among the worst performers in January. HDFC Bank’s disappointing Q3 results led to a 15% decline in its share price, impacting the broader market. Eicher Motors faced a nearly 13% drop due to intense competition in the premium bike segment. Hindalco and HUL witnessed a 12% and nearly 11% decline, respectively, attributed to various factors, including market conditions and lacklustre financial performance.

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.

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