2 years, 9 months ago

FPI selling may continue for most part of the current year

Foreign portfolio investors are likely to remain net sellers of Indian equities for the foreseeable future, having already sold equities worth $27,376 million by 21 June. While the FPI selling in India has remained higher than many other EMs, analysts say India had seen higher allocations too compared with smaller markets and therefore they are not surprised at higher outflows. Though India remains better positioned than many other EMs because of its high GDP growth, strong demand outlook and good corporate balance sheets, experts say FPI selling and foreign outflows may still continue from India. “India is still trading at premium valuations compared to other EMs, despite recent correction,” said Mitul Shah, Head of Research at Reliance Securities. The money flow out of emerging markets will continue with this change in monetary policy and global growth slowdown Once globally expectations settle down for inflation, interest rate and growth, it is then that investors will recognize that India is “an island of relative stability” which should attract FII inflows, said Nishit Master, Portfolio Manager, Axis Securities.

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