VK Vijayakumar, chief investment strategist, Geojit Financial Services, said FPIs will not go for aggressive buying amid a firming dollar.
Basant Maheshwari, co-founder of Basant Maheshwari Wealth Advisors LLP, said the possibility of further increase in interest rates by the US central bank Federal Reserve, fears of recession, depreciating rupee and rising Russia-Ukraine tensions will affect FPI inflows.
Earlier in August, FPIs had infused a net Rs 51,200 crore into equities, according to depository data. His investment in equities in July stood at around Rs 5,000 crore.
After nine consecutive months of withdrawals, FPIs became net buyers in July. The process of withdrawal of FPIs started from October last year. From October 2021 to June 2022, he had sold shares worth a net Rs 2.46 lakh crore.
According to the data, between September 1 and 23, FPIs bought shares worth a net Rs 8,638 crore.
However, so far this month, there has been a lot of volatility in the trend of FPIs in the Indian stock markets. He has sold on seven trading days this month. In the last two trading sessions, FPIs have pulled out Rs 2,500 crore from the stock markets.
Vijayakumar said FPI selling has increased in recent times due to the strengthening of the dollar and rising yields on bonds in the US.
Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said, “The aggressive stance of the US central bank has led investors to avoid risk-taking in emerging markets like India. The Federal Reserve has indicated that it will increase interest rates by 0.75 percent for the fourth time in the next meeting.
FPIs have also infused Rs 5,903 crore into the debt or bond market during the period under review.
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