FPIs sell $1.6 billion of Indian stocks in five trading sessions
After a brief period of optimism, foreign investors are retreating from Indian stocks as rising crude oil prices and escalating global bond yields shift market dynamics. This change reflects a waning interest in emerging market growth assets, compounded by profit-taking strategies and a pivot towards AI investments. While domestic buying could offer some support, ongoing external pressures may…
Foreign portfolio investors (FPI) in India sold nearly $1.6 billion worth of local stocks over five consecutive trading sessions, following a period of buying nearly $6.85 billion worth of Indian equities between mid-June and late-August. This selling trend is attributed to rising crude oil prices, which have surged around 20% since the end of July, as well as the hardening of global bond yields.
These factors are raising concerns over India's inflation, current account deficit, and the rupee, according to Pratik Gupta, CEO and co-head of Kotak Institutional Equities. The recent profit booking after a two-month rally and a visible shift of global capital towards AI-themed stocks in the US, Taiwan, and South Korea have also diminished the appeal of Indian equities.
Experts suggest that a sustained oil price shock and high global bond yields could keep near-term returns muted and make market recovery more dependent on earnings delivery and global factors.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
