Despite Continuous FIIs, FPIs Selling Pressure, Indian Markets At All-time High

The selling pressure in the Indian markets persists with the FPI (Foreign Portfolio Investment) selling during May standing at Rs 17,848 crore so far this month. Data from the National Securities Depository (NSDL) shows that the net FPI investment is negative for May.

The highest selling pressure was seen in the equity markets, where FPI investment was negative for the second consecutive month. However, the debt market shows an investment of Rs 2,009 crore by FPIs so far this month.

However, the Indian markets improved in the last two trading sessions, and the net FPI inflows on Friday stood at Rs 5,490.73 crore, according to the NSDL data. Both Nifty and Sensex also touched all-time highs in the last two sessions.

"FPIs and FIIs have been on a selling trend in Indian stock markets this calendar year. From January to May so far they have net sold around Rs 120,000 crore in Indian markets. This is the secondary market outflow. In May we have seen around Rs 34,000 crore of FPI and FII selling till 24 May," said Ajay Bagga, Banking and Market Expert.

He further added, "The reasons for this are Indian election results uncertainty and risk-off sentiment, some reallocation to the heavily discounted Chinese stocks which had fallen sharply over the last year and general outflows from GEM funds which invest 10-18 per cent of their assets in Indian markets."

The experts highlighted that the FPI outflows caused by election and geopolitical uncertainty, good returns in China equity markets, the U.S. Fed pause on rate cuts, and elevated Indian valuations in the short term exerted pressure on Indian markets.

In April too, FPIs were net sellers in Indian stocks amid the geopolitical crisis in the Middle East, which pushed investors to take money off their portfolios. In April, the net FPI outflows were Rs 16,260 crore, while in the equity market, the investors sold stocks worth Rs 8,671 crore. (ANI)