Street Signs: FPIs on ice, trade deal the thaw, GMP runway lights flash

Foreign investors take a breather amid trade uncertainties, while IPO activity stays strong with four listings this week

FPIs on ice, trade deal the thaw

 

The benchmark Sensex and Nifty fell 0.9 per cent last week, pressured by renewed selling from foreign portfolio investors (FPIs). So far in November, FPIs have net sold equities worth ₹12,569 crore, following net purchases of over ₹10,000 crore in October. “FPIs are booking profits in areas of the secondary market where valuations look stretched, while selectively participating in the primary market. With the year-end approaching, some selling may also be linked to profit-taking, though it’s a bit early for that,” said Deepak Jasani, former head of retail research at HDFC Securities. “A breakthrough in the US-India trade deal would be the main trigger for foreign investors’ return. If that happens, many FPIs currently on the sidelines are likely to resume buying,” he added.

 

GMP runway lights flash: IPOs taxi for lift-off

 

The primary market is set for another active week, with four initial public offerings (IPOs) scheduled — Tenneco Clean Air India, Physics Wallah, Emmvee Photovoltaic Power, and Fujiyama Power System. Tenneco is commanding a grey market premium (GMP) of about 16 per cent over its issue price, while Emmvee’s GMP is around 10 per cent. The other two IPOs are seeing modest demand, with premiums below 10 per cent. “There has been some disconnect between grey market trends and actual listing gains in a few high-profile IPOs recently. Investor fatigue is also emerging as new issues continue to stream in week after week,” said an IPO analyst.

 

Off the ropes, BSE throws counterpunch

 

BSE shares have risen more than 20 per cent since October, supported by easing concerns over a potential ban on weekly derivatives contracts and continued market-share gains, despite the shift in derivatives expiry day to align with the National Stock Exchange. The stock, still sensitive to regulatory developments in derivatives trading, gained further after the market regulator indicated that a move to longer-tenure contracts is unlikely in the near term. Even after this rebound, BSE shares remain more than 10 per cent below their peak.