As FPI invested Rs 17,120 crore in the loan markets, foreign investors withdrew Rs 24,734 crore from equity
According to depository data, till January 25, FPIs have withdrawn Rs 24734 crore from the equity markets. In contrast, FPIs have invested Rs 17120 crore in debt markets during this period. Due to the decline in the domestic markets last week, there has been a decline of Rs 1.16 lakh crore in the market capitalization of seven of the top 10 companies.
Due to the increase in bond yields in America, there is continuous withdrawal of foreign portfolio investors (FPIs) from domestic equity markets. According to depository data, till January 25, FPIs have withdrawn Rs 24,734 crore from the equity markets.
In contrast, FPIs have invested Rs 17,120 crore in debt markets during this period. Earlier, FPI had made a net investment of Rs 66,134 crore in December and Rs 9,000 crore in November. VK Vijayakumar, chief investment strategist at Geojit Financial Services, says the rise in US bond yields is a matter of concern. This has triggered the latest round of selling in the cash market.
According to Vijayakumar, the rise in global stock markets was due to the actions of the US central bank Federal Reserve, which reduced the yield on 10-year US bonds from 5% to 3.8%. However, now it has again increased to 4.18%. This indicates that the Federal Reserve will cut interest rates only in the second half of 2024.
Himanshu Srivastava, Associate Director, Morningstar Investment Research India, says that FPIs have started the new year with caution. With this thinking in mind, he has started booking profits in the Indian equity markets. Throughout 2023, FPIs have invested Rs 1.71 lakh crore in domestic equity markets and Rs 68,663 crore in debt markets.
The market capitalization of seven of the top ten companies has decreased by Rs 1.16 lakh crore as a result of the drop in the domestic markets last week. The largest increase in capitalization over this period has been Rs 32,661.45 lakh crore for HDFC Bank.
Comparably, the capitalization of TCS has decreased by Rs 19,173.43 crore, SBI by Rs 16,599.77 crore, ITC by Rs 15,908.1 crore, HUL by Rs 9,210.4 crore, Reliance by Rs 1,928.22 crore, and LIC by Rs 20,682.74 crore.
On the other hand, the capitalization of Bharti Airtel, Infosys and ICICI Bank has increased by Rs 20,717.87 crore, Rs 9,151.75 crore and Rs 1,137.37 crore respectively. Reliance remains at the top in terms of market capitalization.
