Highest selling of FIIs in last eight months

MUMBAI: Foreign institutional investors (FIIs) have sold equities worth Rs 21,287 crore net in the Indian stock market so far this month, the highest since January 2023, Securities and Exchange Board of India (SEBI) data said.

In January of the current year, FIIs sold equities worth Rs 41464 crore net. As far as the current full year is concerned, FIIs have reported a net sale of equities worth Rs 17,725 crore so far.

The sell-off has come as a result of higher valuations and negative factors globally. High valuations of Indian equities could be a cause for concern at a time when global stock markets are under pressure due to high crude oil prices, housing crisis in China and economic slowdown, an analyst said.

The final meeting of the US Federal Reserve has signaled a prolonged period of high interest rates which could be detrimental to economic growth. High interest rate conditions reduce equity investment flows.

High crude oil prices and increase in raw material prices are affecting the profitability of companies. Brent crude prices rose by eight per cent in September, compared to a 24 per cent rise in the last three months.

The overall market does not seem as strong as it was two-three months ago, the analyst also added.

However, India's inclusion in JP Morgan's bond index has raised optimism among investors for the Indian market. Due to this decision, the Indian bond market will see an increase in foreign investment inflows.