FPIs ship-out, as negative global cues set in

Foreign Portfolio Investors (FPIs) became net sellers in the Indian equities market for the third consecutive week, following negative global and slow domestic reforms which dented sentiments.

The foreign institutional investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Securities and Exchange Board of India (SEBI) to create a new investor category called FPIs.

The FPIs went on a selling spree in the week under review by shedding-off shares worth $371.91 million.

For the week ended Oct 17, the FPIs massively sold stocks worth Rs.2,968.55 crore or $371.91 million, according to data with the National Securities Depository Limited (NSDL).

"Buying by foreign investors has weakened in recent days which is having its downward impact on the INR. The performance of the Indian equities remains contingent on resumption of FII flows," said Sanjeev Zarbade, vice president, private client group research, Kotak Securities.

The FPIs were net-sellers Friday. They sold shares worth $178.45 million, or Rs.1,097.11 crore, on Oct 17.

The FPIs had massively sold stocks for the week ended Oct 10, worth Rs.1,231.28 crore or $200.33 million.

For the week ended Oct 1, the FPIs shed stocks worth Rs.653.95 crore or $105.29 million.

The FPIs had sold stocks worth Rs.2,487.02 crore for the week ended Sep 26 and had only bought shares worth $75.40 million or Rs.458.34 crore.

The week ended Sep 19 saw the FPIs buying shares worth $354.24 million or Rs.2,159.67, which helped propel the Indian equities market to subsequent new highs.

Negative international cues were cited as a major cause for FPIs pulling back. saw selling pressure gaining momentum after US and European markets came under stress which partly reflected the lingering concerns about global economic growth and monetary policy divergence.

European markets were tempered by scepticism about the European Central Bank's promise of further measures to bolster the region's sluggish economy, even as Germany headed for recession.

Last week economic data showed that Germany industrial output figures had fallen to its lowest ever mark in the last five and a half years.

Back home, Indian markets tracking global cues fell. Companies seen most exposed to the global economy such as Hindalco Industries and Sesa Sterlite declined tracking downturn in global markets.

Dogged by the weak FPI sentiment, saw the benchmark Sensex losing 0.71 percent in the weekly trade ended Oct 17 from its previous close on Oct 10. The index closed at 26,108.53 points, while it had ended trade at 26,297.38 points on Oct 10.

The index had lost 1.01 percent in the week ended Oct 10 from its previous close on Oct 1. The index that time had closed at 26,297.38 points, while it had ended trade at 26,567.99 points on Oct 1.

--Indo-Asians News Service

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