Indian stocks are facing the longest run of foreign outflows in five years, an exodus that stemmed from the market’s steady surge in March 2020 from the pandemic.
Foreign institutional investors have been net selling every month since September, dumping $7.9 billion worth of local shares since then. Data compiled by Bloomberg show that the four-month streak of withdrawals is set to be the longest since January 2017. The benchmark S&P BSE Sensex is down nearly 7% since hitting the highest level in mid-October.
The selloff has intensified recently amid global equity trajectory, on concerns that the Federal Reserve will tighten monetary policy more than expected. According to the latest available data, since March 2020, foreign funds have sold over $3 billion Indian shares in this month alone till January 25.
Amit Kumar Gupta, a fund manager at Adroit Financial Services Pvt.
Led by record low interest rates and buoyancy in retail investments, the Sensex more than doubled the value seen back in March 2020 – the best rally for any major equity benchmark. It’s still about 120% above those levels, outpacing the MSCI All Country World Index by about 40 percentage points.
According to Gautam Duggad, an analyst at Motilal Oswal Financial Services Ltd in Mumbai, foreigners held 20.9% in NSE Nifty 500 companies last month, which is the lowest since June 2020. Duggad wrote in a note that his exposure to financial companies has come down to 35 per cent from 45.2% a year ago.
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This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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