Domestic Investors Absorb ₹6,304 Cr FPI Sell-off Amid Surging US Bond Yields

Heavy selling by Foreign Portfolio Investors (FPI) in the equity markets is getting absorbed by domestic funds and retail investors.

In April, FPI selling in equity stands at Rs 6,304 crore. In the cash market during this period, the equity selling stood at Rs 20,525 crore. In the debt market also, there is a trend of renewed selling.

The debt sales in April stand at Rs 10,640 crore, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. The trigger for this renewed FPI selling, in both equity and debt, is the sustained rise in US bond yields.

The 10-year bond yield now stands at around 4.7 per cent which is hugely attractive for foreign investors, he said.

The latest core CPI inflation in the US jumped to 3.7 per cent against the expectation of 3.4 per cent.

This means the prospects of early rate cuts by the Fed are receding. This will keep yields high triggering more FPI outflows in both equity and debt, he said.

"The positive factor is that all FPI selling in the equity markets is getting absorbed by DIIs, HNIs and retail investors. This is the only factor that may reign in FPI selling," he added.