After three months of strong inflows into India’s equity markets, FPI investments has slowed down to just over ₹3,200 crore in the first half of August. Foreign Portfolio investors have invested between ₹43,000 crore and ₹46,600 crore in the previous three months.
The market lacked conviction and remained in a slender range throughout the past week, barring the last trading session, which dragged Nifty below the pivotal level of 19500. Also, the RBI’s status-quo failed to direct any strong trend in the markets. And amidst the lackluster moves, the Nifty50 index concluded the week on a negative note to settle around 19430 zone.
Analysts said that after stock markets scored record gains in the past three months, some profit-booking by the FPIs now can be expected.
“In view of the strong dollar and high US bond yields FPIs may continue to sell in India. Also, since the markets have rallied smartly during the last three months, some profit booking by FPIs would be rational and can be expected,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Brokerage firms are advising investors to stay cautious despite amid recent macroeconomic concerns. Escalating food prices, the rise in crude oil costs, sluggish tax collections, and persistent inflation are expected to contribute to continued challenges.
“Considering the current scenario, we would advocate to avoid undue risk and aggressive trades in the indices. Meanwhile, the broader market space is keeping up the buzz and one needs to be very selective while choosing stock-centric moves for an outperformance. Also, stay vigilant with the global developments as our market awaits some triggering points to come out of the consolidation zone and tune up the next trend,” said Osho Krishan, Sr Analyst, Technical & Derivative Research, Angel One Ltd.