FPIs ship-out, as Q3 numbers disappoint (Weekly Review)

Below-expected quarterly numbers from the banking sector and Reserve Bank of India's decision to keep policy rates unchanged subdued the sentiments of foreign portfolio investors (FPIs) in the Indian equities market in the week ended Feb 6.

"Earnings season have been disappointing for the last three to four days as the third quarter numbers were much below the street expectations and from the banking pack we saw three large banks disappoint the markets expectations," said Gaurang Shah, vice president, Geojit BNP Paribas.

"Selling pressure for both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) has been the order for the last couple of days resulting in a downward move on both the index Sensex and Nifty."

These factors affected the foreign investors in the week under review. Though the FIIs remained net buyers in the equities market including primary market and others segments.

It massively sold stocks on the stock exchanges. The FPIs off-loaded stocks worth Rs.496.06 crore or $80.14 million in the week under review, according to data with the National Securities Depository Limited (NSDL).

For the week ended Feb 6, the FPIs bought stocks in equity and primary markets worth Rs.4,701.86 crore or $761.53 million.

The FPIs had picked up stocks in equity and primary markets worth Rs.6,926.89 crore or $1.12 billion in the previous week ended Jan 30.

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.

Selling pressure from foreign funds in the stock markets led the barometer of Indian equities markets to fall 465.04 points or 1.59 percent during the week ended Feb 6.

For the week ended Feb 6, the benchmark 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) was down 465.04 points or 1.59 percent in the weekly trade.

The barometer index closed at 28,717.91 points, while it had ended trade at 29,182.95 points on Jan 30.

In the weekly trade ended Jan 30 the benchmark index was down 95.89 points or 0.32 percent at 29,182.95 points, while it had ended trade at 29,278.84 points on Jan 23.

Other analysts did not rule out a possibility of a per budget rally led by healthy foreign inflows around the budget time. Sharp moves and high volatility is expected in the last week of February due to F&O (future and options) expiry as well as rail and union budget.

The next major trigger for the FIIs and markets in the coming week will be data point on the domestic front such as gross domestic product (GDP) numbers on Feb 9.

This will be followed by export/import data on the Feb 10 and indexof industrial production (IIP) and consumer price index (CPI) numbers on Feb 12. These data points may also give a directional call on the RBI move for the next credit policy.

On Friday, S&P BSE Sensex closed the day's trade at 28,717.91 points, down 133.06 points or 0.46 percent from the previous day's close at 28,850.97 points.