Mumbai: Foreign portfolio investors sold equities worth Rs 45,536 crore in September as rising US bond yields and concerns over high crude prices hurt sentiment. However, they invested Rs 9,676 crore through the primary market, showing continued interest in selected opportunities.
The selling has dragged Indian shares lower, although the correction has made valuations of large companies more attractive, according to market experts.
Global Pressures Weigh
The US bond yield climbed above 5.2 per cent, adding to pressure on Indian equities. Worries that crude prices could stay high for longer also weighed on foreign investors.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said sustained foreign selling had weakened the market, which recorded eight consecutive weeks of losses.
Rainfall that was 13 per cent below normal further hurt sentiment. Analysts said a lasting reversal in foreign selling would require positive developments, including lower crude prices and US bond yields.
Selling Gains Pace
Foreign selling intensified towards September’s end and continued into October. Across four trading sessions from September 28 to October 1, provisional equity selling stood at about Rs 34,965 crore.
Settled selling for the corresponding reported activity was about Rs 27,962 crore. The positive foreign flows seen in July and August, driven by hopes of cheaper crude, proved temporary.
Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, said primary market investments alongside secondary market selling showed that foreign investors were becoming more selective about deploying money in India.
Domestic Buyers Offer Support
Domestic institutional investors bought Rs 76,030 crore in cash equities during September, according to provisional NSE data, providing support against the foreign selloff.
Sustained buying by domestic institutions and retail investors has helped prevent a sharper market decline.
Attention will now turn to companies’ results for the second quarter of FY27. Businesses reporting strong earnings and positive management commentary could attract buyers, even as global developments continue to shape foreign investment flows over the coming weeks.
