The noise around the so -called heavy sales by foreign investors in India is a significant difference: there are no signs of mass migration. Nevertheless, they are ready to get out at the lower levels, increasing the feeling of recession.
Foreign portfolio investors (FPIs) have shares sold for $ 21 billion in four months through the end of January, showing data of National Securities Depository Limited (NSDL). This is about 2.7% of the total equity holdings of $ 782 billion as of January.
This actual sales are for just 14.2% of the decline of $ 148 billion in their assets from $ 930 billion cumulative by the end of September. The rest is responsible for unrealistic damage in its portfolio.
Nilesh Shah, managing director of Kotak Mahindra Asset Management Company Limited, said, “The actual sales figure as a total assets ratio can be insignificant, but is there a desire to continue selling at the lower level despite the minimum India being India,” . “
Shah said that domestic institutional investors like mutual funds were bidding at the lower level to get out of FPI. It has dropped the Nifty from a record high of 26,277.35 on 27 September to 23,031.4 on 27 September to 23,031.4 on Thursday.
Also read FPI dumped Indian financial shares in January. But not bad for all areas.
Small and mid-cap (SMID) index have fallen more than the benchmark, which is specific during an improvement, the bear slips in the bear market area with a small-cap index-a single drop of 20% or more than the ricard-Cords. Para-Friday.
The Nifty Smallcap Index declined by a record high of 18,688.3 on 24 September on 24 September. The Nifty Midcap 150 has fallen from its all -time high to 18.5% of 22,515.4 on 25 September, which has increased to 18,346.8 on Friday.
The underperformance of SMIDS for Nifty shares can also be attributed to intensive sale by FPIS at the post of these counters, as they used to increase the weight of small and middle-cap at the cost of blue chips.
According to the Capital Market Data provider Primer Primal Database, the Nifty Smallcap 250 increased by 13.25% in FPI Agigeting 250, which ended at 12.83% in the previous quarter on December.
In the Nifty Midcap 150, the agargeate increased from 14.86% to 15.31% in the shareholding period to 15.31%. However, their ownership in Nifty 50 fell to 22.97% by 23.29% in the December quarter, showing data.
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Any investment in SMID space should only be made for “long -term” and “stock picking” should ideally be practiced through a fund manager, Swarup Mohanty, Vice Chairman and Chief Executive Officer of Mirray Asset Investment Managers Said. ,
Meanwhile, India’s weight on the MSCI Emerging Market Index on the MSCI Emerging Market Index slipped to 18.41% in the end of January by about 20% to the end of January, behind China’s 27.52% and 20.02% in Taiwan.
Foreign investors track MSCI indices to allocate funds to markets around the world.
Shah of Kotak AMC said that the market continued to improve as FPIs were selling at the lower level despite India’s low weight. As long as it continues, the market will remain turbulent, he said.
Those who were not selling FPIs are shortening the index futures like Nifty and Bank Nifty to hedge their stock portfolio. NSE data shows that FPI NET shorts in index futures were close to record height of 183,589 contracts on Thursday.
Also read FPI Double Down on Sale of Nifty Options ahead of MPC meeting results
According to Ur Bhat, co-founder of Alphhanity Fintech, FPI sales were led by inactive trackers such as hedge funds and eTF or index funds to re-order their portfolio.
Shah of Kotak AMC said that sales have led American funds as part of an “EM movement” in favor of American bonds, which is in part of optics for “curry favor” with President Donald Trump.
Domestic institutional investors (DII) have absorbed FPI sales in secondary market by purchasing shares. According to BSE data, against the sale of 2.73 trillions in four months through January 2.38 trillions by foreigners in the cash market during this period.
The value of the FPI Open Interest or Outstanding Posts in Index Futures to hedge its stock market portfolio at the end of January. 7.4 trillion.
Read more FPI double down at recession ahead of Trump 2.0
