FPIs Turn Net Sellers Amidst Rising US Bond Yields

FPIs Turn Net Sellers Amidst Rising US Bond Yields

Asif Iqbal | October 21, 2023 | 09:07 PM IST | Breaking News | Follow on Google News

FPIs Turn Net Sellers Amidst Rising US Bond Yields

In the midst of ongoing geopolitical tensions in the Middle East and a surge in US bond yields, foreign portfolio investors (FPIs) found themselves positioned as net sellers during the third week of October. The repercussions of these market movements have been profound, prompting FPIs to offload significant holdings.

FPIs’ Sell-off in Indian Equities and Assets

According to data provided by the National Securities Depository Ltd (NSDL), FPIs have divested ₹12,146 crore worth of Indian equities and a total of ₹6,55 crore, considering a spectrum of assets, such as debt, hybrid instruments, debt-VRR, and equities. This substantial figure encompasses not only regular trading activities but also bulk deals and investments in the primary market. A noteworthy observation is that the cash market bore the brunt of FPI selling, with transactions amounting to ₹16,176 crore.

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Changing Market Trends: FPIs Transition from Buyers to Sellers

Over the past three months, there had been a consistent trend of FPIs increasing their holdings in the Indian market. However, the recent shift towards selling has disrupted this pattern. The primary catalyst for this change has been the skyrocketing US bond yields, a factor that has influenced FPIs’ decision-making since the previous month. Analysts unanimously point to the surge in US bond yields as the major driver of FPI outflows in recent times.

Factors Affecting FPI Flows

Various factors are contributing to the uncertainty surrounding FPI flows. As Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, asserts, “Flows from foreign institutional investors are expected to remain volatile on increasing concerns about elevated global interest rates, rising energy prices, and a mixed set of corporate earnings print in Q2FY24 so far.” This confluence of factors has put FPIs in a cautious stance, closely monitoring the global economic landscape.

Asif Iqbal

Asif Iqbal is a seasoned news writer with a passion for delivering the latest updates to the public. Currently serving as the senior writer at VoM News, a prominent news outlet known for its comprehensive coverage of diverse topics, Asif has established himself as a reliable source of information. With a keen eye for detail and a knack for storytelling, he consistently provides readers with well-crafted articles that cover a wide range of news categories. His dedication to journalistic integrity and his commitment to staying ahead of the news curve make him an invaluable asset to Vom News, ensuring that readers are always well-informed on the issues that matter most. You can find his work and stay updated on current events by visiting vomnews.in.