MUMBAI: Foreign investors, who earlier this week had turned net buyers of Indian stocks after nearly two months, sold aggressively on Thursday to pull the sensex down by 1,190 points to 79,044. Except for SBI that closed marginally higher, all 30 sensex constituents closed in the red.
The day’s selling left investors poorer by Rs 1.4 lakh crore, with BSE’s market capitalisation now at Rs 451.8 lakh crore. At close of trade, foreign funds were net sellers at Rs 11,756 crore, translating to about $1.4 billion, data showed.
Expiry of derivative contracts adds to mkt volatility: Experts
This was the biggest single-session net outflow in several months, dealers said. Also, data on bourses didn’t show any large block deal in which any foreign fund was the seller. This indicated that FII selling was across-the-board, they said.
The overnight sell-off in the US market, on the back of renewed uncertainty about the rate cut trajectory in the world’s largest economy, and the rising geopolitical tension led to a correction in the domestic market, said Vinod Nair, head of research, Geojit Financial Services. “The broader market outperformed the frontline index due to a shift in the stance of (foreign portfolio investors) and investors seeking opportunities in undervalued stocks.”
Expiry of current month’s derivative contracts during the day also added to the market’s volatility, dealers said.
During the day’s session, domestic institutional investors (DIIs) tried to cushion the heavy selling by FPIs. At close, DII recorded a net buying figure of Rs 8,718 crore, BSE data showed. The day’s strong selling of stocks by FPIs took the month’s total to close to Rs 25,000 crore. Although this is about a fourth of Oct’s figure that was at about Rs 1 lakh crore, investors are still shaky about coming back to buy. “There is still a lot of apprehension among the investors as FII outflows have continued for almost two months now,” said Prashanth Tapse, senior VP (research), Mehta Equities.