The year has turned out to be a challenging and forgettable year for global equities, given several headwinds including rate hikes, energy crisis, Russia-Ukraine conflict, continued supply disruption, FPI outflows, increased inflation, and much more. In September 2022, FPIs stopped their purchases for two consecutive months and exited 7,624 crore as monetary policy tightened amid intensifying inflationary pressures in major economies and rising fears of a slowdown.
With FIIs continuing to sell Indian shares, well-known Indian investors Shankar Sharma Defined the act as the ‘special absurdity’ of selling to the ‘best performing market’ in the world.
“If you need any proof that Wall Street and FIIs know nothing about investing, look no further than their India selling data over the last 18-20 months. The best (performing) market in the world to sell Requires special stupidity,” tweeted Sharma.
So far in 2022 (Year-to-Year or YTD), FPIs have removed approx. 1,66,349 crore from equity alone. Taking into account other devices, the overall Indian market witnessed an outflow of 1,72,891 crore so far in the current year. Foreign institutional investors (FIIs) remained net sellers in the Indian capital market on Friday as they offloaded shares of 1,011.23 crore as per exchange data.
In the first half of the current fiscal year (April-September FY23), FIIs have sold Indian shares worth $7.69 billion, becoming a net seller of $900 million in September after buying $7 billion in July-August. With the rupee falling more than 3% since August to end-September low of 81.95, FIIs have turned cautious, not only net selling in the cash market, but also looking to hedge their cash portfolios. The scale is shorting index futures.
Foreign institutional investors (FIIs) continue their selling spree, and according to analysts, investors are deeply risk averse following the US Federal Reserve’s latest rate action and announced resolution to fight inflation. Equity exits have also been accelerated by escalating Russia-Ukraine conflict, prompting investors to hedge dollar assets. The US Fed revising growth expectations has shaken investor sentiments, further raising fears of a recession.
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