Due to election panic, FPI sold shares worth more than Rs 17 thousand crore in 6 sessions.


Mumbai: Foreign fund managers are taking money off the table amid the boom. market volatility Due to uncertainty regarding the outcome of Lok Sabha Elections, Also, domestic institutions – mainly mutual funds – have been big buyers on Dalal Street.
In addition to election anxiety, a recent rally in Chinese shares may also get a shock foreign investors Market players said some funds from India to shift to China and Hong Kong.
In just six trading sessions this month, FPI CDSL data shows that the company has sold shares worth about Rs 17,083 crore net. If Friday's provisional net sales figure of Rs 2,118 crore (which will be finalized and published by the depositories on Monday) is also included, the net sales figure would be Rs 19,201 crore – about $2.3 billion.

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Moreover, excluding net foreign fund inflows through the primary market, the net outflow from the cash market will be around Rs 25,000 crore. CDSL data showed that FPIs recorded a net outflow of Rs 8,671 crore in April, while in March the figure was a net inflow of Rs 35,098 crore.
According to Siddharth Khemka of Motilal Oswal Financial Services, heavy foreign fund selling and concerns over the outcome of the ongoing general elections are weighing on market sentiment.
BSE data showed cumulative buying by domestic institutional investors stood at Rs 19,410 crore in May, as opposed to net selling by FPIs. Notably, it is mutual funds, which received over Rs 20,000 crore of retail money through SIPs in April, that are investing aggressively in the stock market, dealers said. Net buying by DIIs stood at Rs 44,186 crore in April, compared with Rs 56,311 crore in March, BSE data showed.
in the last three Lok Sabha In the two months leading up to the elections – and even during the months when the elections were held – FPIs were net buyers, despite the uncertainties that come with any election.
In 2009, when the Manmohan Singh-led UPA retained power at the Centre, FPIs were net buyers of Rs 20,117 crore – the highest net inflow figure during and around general elections.
According to VK Vijayakumar, chief investment strategist at Geojit Financial Services, FPIs have become net sellers in the domestic market as India is underperforming – Nifty has fallen 2% in the last month – while indices in China (Shanghai Composite) are up 4%. ) and Hong Kong (Hang Seng is up 11%) have shown strength.
“The FPI strategy is to sell in India, which is expensive, and buy in China which is much cheaper, mainly through Hong Kong. The PE ratio in India is more than double that of Hong Kong.”
However, Vijayakumar believes that the 'Sell India, Buy China' situation may change dramatically once the election results are out. “If the election results are favorable from the market perspective, the market could move sharply higher on aggressive buying by DIIs, retail and HNIs.”



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