Foreign portfolio investors (FPIs) have been aggressively selling Indian stocks in May, reaching a total of ₹22,046 crore by the end of the month. This consistent selling is partly due to factors like a strong US dollar, persistent inflation, especially in the food sector and concerns about election outcomes.
However, there has been a slowdown in selling in recent sessions as investors anticipate a strong performance in the stock market indices. Both the Nifty and Sensex reached all-time highs this week, attracting significant investments.
Data from the National Securities Depository Limited (NSDL) showed that a week ago, the cumulative total of selling was approximately ₹28,000 crore.
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How will Lok Sabha elections impact FPI?
VK Vijayakumar, chief investment strategist at Geojit Financial Services, noted, “The FII selling, which began as a trickle in April, turned into a flood in May. Going forward, as clarity emerges on the election front, FIIs are likely to buy in India since they cannot afford to miss the post-election results rally. In fact, the rally may begin even before the election results.”
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How has FPIs trend been this year?
April: FPIs were once again net sellers in Indian stocks, possibly influenced by the ongoing geopolitical tensions in the Middle East. Despite being net buyers until mid-April, FPIs sold stocks worth ₹8,671 crore by the end of the month.
February and March: FPIs shifted back to being net buyers.
January: FPIs significantly sold Indian stocks, becoming net sellers in the equity market.
(Inputs from PTI, ANI)
