In 8 Trading Session over $1 billion sell of  from FIIS, is it any kind of warning ?

Due to negative sentiment in Global market and fear of recession, with in previous 8 trading sessing FIIS (Foreign Investors) have sold almost $1 billion in Indian equity market.

Getting daily wise data from NSE, on Sept 23^rd , FIIS have sold Rs 2899.68 crore of shares.

Actually they have started selling from 14^th sept, and they are almost continue selling, from last 7 session, in 5 session they are net seller.

Overall if we check then from oct 2021 to till June 2022 they were net seller and during these session they have sold over 34.43 billion, after it after mid july they found India is getting better data at macro economic level.

So from mil july they starter buying and their buying continued till sept 13, during these session they are bought around $9.79 billion. Now again they have started selling. This was the biggest sale by FIIs in recent times.

India’s stock markets lost all gains year to date and have turned negative. Both the Sensex and the Nifty 50 are down 1 percent each since the start of this year, and they have dropped over 8 percent each in dollar terms.

Weaker rupee in front of dollar

Indian rupees is continuously going weak, and recently on 26 sept it has touched a fresh low of of 81.55 against the US dollar.

During this year to till date, The local currency has depreciated 8.5 percent. Meantime, the dollar index hit a 20-year high, having risen over 17 percent this year.

US Fed rate hike to control inflation

“The US Fed’s efforts to control inflation in the United States, through aggressive rate hike may force other central banks to follow rule.

This has impacted globally, the RBI may have to raise policy rates beyond levels warranted by domestic inflation alone, given currency challenges.

 We believe that higher-than-expected interest rates will have negative implications for the economy and markets both,”

Despite the heavy selling still most of the investor expecting foreign investors to keep buying in Indian market.

This time one positive major is crude that is support Indian  economy, currently it is trading far bellow $100, which is a sign of relief for Indian economy.

According to deputy head of HDFC Securities we expect FPI investors to scale up their purchases, “Domestic markets have been relatively strong and with the way the Indian economy is slated to grow.

According to Prashant Tapse, an analyst at Mehta Equities, despite inflation concerns and higher input costs, there are factors supporting growth.

Good GST collections, better GDP growth in the Asian region, improvement  in tax collections, and an above-normal monsoon have helped to keep India’s economy better than those of other emerging economies.

The latest Fed statement included interest rate projections for the end of 2023 and 2024 that are higher than the previous forecasts. The US Fed hiked the interest rate by another 75 basis points on September 22 .

Now all are waiting for Reserve Bank of India’s Monitory policy on 28-30 September.

“It is expecting by most of the market expert,  the MPC (Monetary Policy Committee) to vote for a 50 bps policy-rate hike next week, and change its stance to neutral.

In Barclays report , is said, Falling commodity prices giving some relief, but we negative global sentiment and high inflation will lead the MPC to stick to its frontloaded tightening cycle.