This is an archive article published on June 7, 2024
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Amid market crash & recovery, FPIs pull out Rs 18,109 crore so far in June
Net FPI outflows were at record high of Rs 12,436 crore on June 4, the day Lok Sabha election results were announced and the Sensex crashed by 6 per cent.
Meanwhile, on Thursday, the 30-share Sensex rose 692.27 points, or 0.93 per cent, to close at 75,074.51. The broader Nifty gained 201.05 points, or 0.89 per cent, to end at 22,821.4.
After investing Rs 6,850 crore on June 3 — after the exit poll results were announced — foreign portfolio investors (FPIs) were big sellers in the stock market in the next four days amid the fall and rise in stocks in the wake of the unexpected poll outcome.
Foreign investors have taken out Rs 18,109 crore from the cash market (excluding IPO investments) in the month of June so far, according to exchange data. On the other hand, domestic institutional investors (DIIs) have net purchased Rs 6,864 crore of equities so far in June.
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Net FPI outflows were at record high of Rs 12,436 crore on June 4, the day Lok Sabha election results were announced and the Sensex crashed by 6 per cent.
On June 5, while the Sensex recovered by 3.2 per cent per cent, FPIs sold 5,656 crore and turned sellers again on June 6 with Rs 6,867 crore of outflows.
In the recent past, FPIs have pulled out money from India because of the expensive valuation and were investing in China and also due to election related uncertainties, analysts said. As the election results are out and with the formation of a new government under the National Democratic Alliance (NDA) coalition, analysts expect FPIs to again start investing in India.
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According to Deepak Jasani, Head of Retail Research, HDFC securities Ltd, events like the passage of a vote of confidence, the announcement of the council of ministers and their portfolio allocation, and policy announcements (including the Union Budget) could lead to an increase in the confidence of foreigners.
“The valuation of Indian equities may look better in case Nifty EPS (earning per share) is upgraded based on the revived momentum of the economy post the new government settling down to business,” Jasani said.
Indications of a rate cut by the US Federal Reserve or the RBI could also lead to heightened interest in Indian equities. If monsoon arrives on time and makes a good beginning across the country in terms of spread and intensity, FPIs may rework the earnings estimates of corporates and start investing, he said.
Meanwhile, on Thursday, the 30-share Sensex rose 692.27 points, or 0.93 per cent, to close at 75,074.51. The broader Nifty gained 201.05 points, or 0.89 per cent, to end at 22,821.4.
Meanwhile, on Thursday, the 30-share Sensex rose 692.27 points, or 0.93 per cent, to close at 75,074.51. The broader Nifty gained 201.05 points, or 0.89 per cent, to end at 22,821.4. 
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