Foreign portfolio investors sell shares worth over Rs 22,000 crore in May! What should your strategy be?


The Indian inventory market has been experiencing important stress, significantly in shares of firms with increased international possession, as abroad investors have been promoting off their holdings. In May alone, international portfolio investors (FPIs) have bought shares worth over Rs 22,000 crore, following a pullout of Rs 21,524 crore in April. Consequently, greater than 100 shares with over 5% FPI stake as of March 31, 2024, have seen declines starting from 10% to 30%, in comparison with a mere 1.7% fall in the Nifty index.
G Chokkalingam, founding father of Equinomics Research, informed ET, “In the present circumstances, FPIs are adopting a risk-off strategy, foreseeing significant volatility leading up to the general election.” He has suggested investors to restrict their publicity to FPI-heavy shares till the elections conclude.
Several FPI-heavy shares, akin to Aster DM Health, Sonata Software, Paisalo Digital, Gujarat State Petronet, Coforge, and Birlasoft, have skilled drops between 20% and 30% in the previous month.

FII Holding

While FPI promoting could have contributed to this decline, analysts counsel that weaker-than-expected outcomes in a few of these firms have led to broad-based promoting throughout numerous investor classes.
Large-cap shares with higher-than-average FPI holdings, together with Larsen & Toubro, HCL Technologies, Kotak Mahindra Bank, Titan, and DLF, have additionally fallen by greater than 10%, with HDFC Bank, Infosys, and Bajaj Finance declining over 5% in only one month.
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Joseph Thomas, head of analysis at Emkay Wealth Management, says, “FPI-heavy larger stocks have not given any returns to investors in the last two to three years.” He means that investors could take into account staying invested in these shares as a result of lack of great actions or discover mid-caps for higher value efficiency.
The present promoting development by international investors marks a deviation from the patterns noticed in the earlier two basic elections. In 2019, FPIs bought shares worth almost Rs 25,000 crore in the 2 months main as much as the election outcomes, whereas in 2014, they acquired shares worth Rs 36,500 crore in the 2 months previous the elections.
Some FPIs are reallocating their investments from Indian shares to China and Hong Kong, that are at present buying and selling at extra engaging valuations in comparison with most international markets. VK Vijayakumar, chief funding strategist at Geojit Financial Services, has attributed the aggressive promoting by FPIs to the outperformance of China and Hong Kong over the past month and the underperformance of India.
The Hang Seng Index in Hong Kong has surged by over 16% in one month and 18% in two months, whereas China’s Shanghai Composite has gained 4% and 15% in the final one and two months, respectively.

Nilesh Desai
Nilesh Desai
The Hindu Patrika is founded in 2016 by Mr. Nilesh Desai. This website is providing news and information mainly related to Hinduism. We appreciate if you send News, information or suggestion.


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