Possibility of curbing foreign investment in Indian equity market


Ahmedabad: Analysts say that foreign investment in the Indian equity market is likely to come to a halt in the short term. This is due to rising crude oil prices, policy measures by global central banks, rising bond yields and strength in the dollar index. Valuations look expensive as the market hits record highs. Foreign investors may sell in the coming days.

Higher bond yields in the US (10-year bond 4.28 percent) and the dollar index crossing 105 are expected to trigger further selling by foreign institutional investors. As of September 15, 2023, foreign portfolio investors have withdrawn from Indian stock markets Rs. 6,027 crore and in 2023 his net investment in Indian stocks was Rs. 1.31 lakh crores.

In contrast, Mutual Funds and DIIAs respectively Rs. 7,664 crore (as on September 12) and Rs. 10,230 crore (up to September 15) had been invested.

Higher crude oil prices will once again fuel inflation and central banks will insist on raising interest rates, which could affect the global economy. Ahead of US monetary policy this week, global investor activity could remain volatile and oil prices and US bond yields could rise.

From a technical perspective, analysts believe that the market may slow down after a strong rally in the last few months. He says that the Nifty-50 index is trading near the resistance of 20,300. In case of decline, the range of 19,700-19,950 will act as support for Nifty. When this index crosses 20,300, it will gradually help to touch 20,700 level.


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