FPIs Dump Shares Worth ₹14,794 Crore First Week Of June As Domestic Investors Remain Resilient

As the chaos unleashed by the Lok Sabha elections depleted in intensity through market recovery post-June 4, the month of June has still packed some set of bad news for the markets. And this bad news comes from the corner of Foreign Portfolio investors, or FPIs.

The FPIs, according to reports, have gotten rid of shares worth Rs 14,794 crore from Indian equities just in the first week of June.

In all, in the first five months of 2024, FPIs have offloaded shares worth Rs 38,158 crore from the Indian equity markets. It should also be noted that there was a significant purchase that transpired in March.

Despite Drop In FII Markets Remain In Green

These developments came to pass in the time period when the markets vacillated from extreme highs on June 3, post exit polls on June 1 to the cataclysmic lows of June 4, when the exit polls got it wrong and the results seemingly pushed investors into a limbo.

Here, FPI or Foreign Portfolio investors, are those investors who buy foreign assets, in the form of Fixed Deposits, Stocks and Mutual Investments. Unlike domestic investors, on the other hand, are investors based in the nation of the markets.

It is to be noted, as mentioned before, that after the frenzy, the markets have returned to business as usual, as the marquee indices even scaled to lifetime highs.

In fact, the markets ended a tumultuous week in green, the Sensex ended June 7 at 76,693.36, gaining 2.16 per cent. Nifty also closed in green with a major 2.05 per cent gain, ending at 23,290.15.

Exodus Attributed To Uncertainty

These high numbers at Dalal Street, despite the FPI exodus, are being attributed to the steadfast investment of domestic institutional investors. It is to be noted that on Friday, FPIs were net buyers and DII was on the selling side.

This slide in interest from the side of the FPIs is attributed to the perceived volatility in the market and the possibility of uncertainty with the incoming coalition NDA government, under the leadership of the BJP.

In addition, the need for cheaper markets could be another reason driving investors away from Dalal Street. However, strong economic indicators, at least in terms of GDP figures, could bolster the possibility of this phenomenon changing.