In September, FPIs bought domestic equities worth Rs 57,724 crore while in August, they had purchased shares worth Rs 7,322 crore which was down month-on-month from July when the total buying figures stood at Rs 32,359 crore. In June, they were net buyers at Rs 26,565 crore after remaining net sellers in April and May when they sold equities worth Rs 8,671 crore and Rs 25,586 crore respectively.
In February and March they were net buyers at Rs 1,539 crore and Rs 35,098 crore after starting the year on a negative note in January when they offloaded shares worth Rs 25,744 crore.
On Friday, the foreign institutional investors (FIIs) were net sellers at Rs 4,162.66 crore while the domestic institutional investors (DIIs) were net buyers at Rs 3,730.87 crore.
“The major trend in foreign portfolio flows in October, so far, has been the sustained selling by FPIs. FPIs have been following a strategy of ‘Sell India, Buy China’ after the Chinese authorities announced monetary and fiscal measures to stimulate the slowing Chinese economy. FPI money has been moving to Chinese stocks, which are cheap even now,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.
Hang Seng index (Chinese H stocks are listed in Hong Kong) is now trading at a PE of about 12 while Nifty is trading at a PE of 23 times estimated FY25 earnings, Vijayakumar said, hinting at the valuation difference in the two major Asian indices. He expects more money to move to Chinese stocks given the valuation differential being too big now and this may sustain the FPI selling for some more time, he opined.However he is of the view that India has much better growth prospects now compared to China and therefore, India deserved premium valuations.
Chinese markets have been rising on the government stimulus and market experts have called it a temporary phenomenon arguing that structural problems in the Chinese economy were far deeper.
While FPIs have been bearish on India in October, domestic institutional investors have held their ground. Vijayakumar sees this trend of FII selling and DII buying to likely continue in the near-term.
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