FPI returns since 4 June all but wiped out
Source: Live Mint
The continuing slide of the Indian markets on Monday saw dollar returns of foreign investors all but wiped out since the general election results day low of 4 June.
Benchmarks NSE Nifty and BSE Sensex, buffeted by sustained foreign investor selling amid a US tech rout, fell more than 1% each on Monday, even as the BSE Dollex 30 fell 1.29% due to a weaker rupee. The Dollex is the US dollar version of the bellwether Sensex 30.
After Monday’s fall, the BSE Dollex 30 traded at 7,161.83, just 1% away from its closing low of 7,085.67 on 4 June. That day, the Dollex, tracking the Sensex, had tanked 6% overnight with the BJP falling short of winning a majority on its own in the Lok Sabha elections.
In contrast, the Nifty at Monday’s close of 22,829.15 and the Sensex at 75,366.17 are still more than 4% away from their lows of 21,884.5 and 72,079.05 on 4 June. The dollex’s underperfomance is because of the rupee depreciating by 3.36% to 86.34 to the US dollar over the same period.
Low to peak, back again
The Dollex had risen 19% from its 4 June low to a record closing high of 8,419 on 26 September from where it has plunged amid a falling rupee and weakness in corporate earnings.
“In dollar terms, foreigners are close to making zero returns this year and keep selling amid an organic slowdown in India,” said veteran investor Shankar Sharma. “The tech rout seen on Monday and Trump’s measures merely accentuate the weakness.”
Sharma was referring to the 3.5% fall in Nasdaq futures on competition concerns from Chinese AI start-up DeepSeek, which won top spot on Apple iPhone’s app store.
According to data from BSE, foreign portfolio investors (FPIs) sold shares worth a provisional ₹5,015.46 crore on Monday, taking their total outflows in the secondary market to ₹77,818 crore so far this month. Against this, DIIs have net invested ₹73,587 crore in the same period.
“FPI selling has been aggressive and DIIs are giving them an exit at lower levels,” said Nilesh Shah, managing director of Kotak Mahindra Asset Management, adding that while US-based FPIs have turned underweight on India, their outflows could reverse once the dollar index corrects or US interest rates fall.
What lies ahead
Monday’s fall has poised the market at a strong support of 22,800, which if broken, could take the market toward its 4 June lows.
Other market veterans sounded more optimistic. “I believe we might be close to a bottom and it’s a good time to begin investing in quality now,” said Dinesh Thakkar, chairman and MD of Angel One, the country’s second biggest broker by clients.
Thakkar expects the government to indicate a step-up in spending in the second half of the current year in the forthcoming budget on Saturday. This, apart from likely income-tax relief, would “bode well” for the economy and the markets, he said.
Monday’s mayhem dragged down the broader markets more, which is typical in a falling scenario. The Nifty Midcap 250 closed down 2.8% at 19,152.10 while the Nifty Smallcap index plunged 3.66% to 15,416.3.
The Nifty Midcap 150 trades almost 15% below its 25 September record high of 22,515.4 while the Nifty Smallcap 250 trades 17.5% below its record high of 18,688.3 on 24 September last year. Against this, the Nifty has fallen 13.12% from its lifetime high of 26,277.35 on 27 September.
