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Global uncertainties triggered FPI sell-off

ICICIdirect Research 16 Aug 2024 DISCLAIMER

FPIs buying spree seen post-election verdict turned into selling after announcement of union budget. Post election verdict, FPIs have poured nearly 75k crores in the secondary markets which helped Nifty to surpass 25000 levels in July. However, post rate hike by Japanese Central Bank, they have turned aggressive sellers and in last 3 weeks only FPIs have sold nearly 40k crores in secondary markets as Nifty lost nearly 1200 points from highs.
Also, couple of weak economic data points from US also didn’t help and the selling pressure was observed across the risk assets. During the last three weeks, FPIs have sold nearly $6 Billion from Taiwan, $2 Billion from South Korea compared to nearly $3 Billion outflows from India.
However, we believe with impending rate cuts in September, FPIs may turn net buyers once again in India. Also Indian equities are likely to witness inflows of nearly $3 Billion in the coming MSCI rebalancing during the August month end.

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