Street Signs: Market mood swing, FPI additions double in FY25, and more

A pendulum of fear and hope as January winds down

 

Indian equity benchmarks closed last week with losses, weighed down by disappointing corporate earnings and ongoing selling by foreign portfolio investors (FPIs). Both the Sensex and Nifty dropped by 1 per cent during the week. Markets faced challenges from rising oil prices, a weakening rupee, uncertainty around US policy, and rate cuts by the US Federal Reserve. Analysts expect the weak trend to persist until the end of the month. The increase in crude oil prices has further dampened investor sentiment, and FPIs are likely to either hold back or continue selling until the Union Budget is announced on February 1. “From a technical perspective, the Nifty has breached its November 2024 low of 23,263.15 and is facing selling pressure on each recovery attempt. We expect the index to test the 22,700 level, with minor support at 22,900. Any rebound is likely to encounter strong resistance in the 23,500-23,700 zone,” said Ajit Mishra, senior vice-president of research at Religare Broking.

 

The regulator strikes back: Cutting the puppet strings of market fraud

 

The market regulator’s recent action against Pacheli Industrial Finance has prompted further investigations, particularly in companies where promoter shareholding has fallen sharply in a short period. A source familiar with the matter revealed that the regulator accelerated its review and reached preliminary findings within 11 days, aiming to prevent a pump-and-dump scheme before the shares were offloaded following a rapid price increase. A market participant commented that this is likely the first time the regulator has intervened in time to halt the rally before major damage could occur. The stock hit the upper circuit limit every session for over a month. Sources indicated that the Securities and Exchange Board of India may even scrutinise exchanges, which serve as the first level of regulation, for any lapses in surveillance.

 

The welcome mat is out: FPI sign-ups double in FY25

 

Despite tightening disclosure requirements for foreign portfolio investors (FPIs), with new thresholds for reporting investments, the rate of FPI onboarding has accelerated. A recent statement from a Securities and Exchange Board of India official revealed that, on average, 130 new FPI registrations have occurred per month in 2024-25 — almost double the number in 2023-24. While the registration process has been streamlined, the official mentioned that tracking systems developed by depositories are helping manage pending registrations. The FPI Outreach Cell, formed a few months ago, has already engaged with over 1,000 FPIs to address any onboarding issues.