In September, FPIs bought domestic shares worth Rs 57,724 crore, while in August they had bought shares worth Rs 7,322 crore, which was lower month-on-month than July when total buying figures stood at Rs 32,359 crore. In June, they were net buyers of Rs 26,565 crore after remaining net sellers in April and May when they sold shares worth Rs 8,671 crore and Rs 25,586 crore respectively.
In February and March, they were net buyers of Rs 1,539 crore and Rs 35,098 crore after starting the year on a negative note in January when they sold 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 main trend in foreign portfolio flows in October so far has been continued selling by FPIs. FPIs adopted a ‘Sell India, Buy China’ strategy after Chinese authorities announced monetary and fiscal measures to stimulate the slowing Chinese economy. FPI money has shifted to Chinese equities, which are cheap even now,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The Hang Seng index (Chinese H shares are listed in Hong Kong) now trades at a price-to-earnings ratio of around 12, while Nifty trades at a price-to-earnings ratio of 23 times estimated FY25 earnings, Vijayakumar said , referring to the valuation difference between the two major Asian indices. . He expects more money to move into Chinese stocks as the valuation gap is now too big and this could support FPI selling for a while, he said. However, he believes that India now has much better growth prospects compared to China and China. therefore, India earned premium valuations.
Chinese markets have risen thanks to government stimulus measures and market experts are calling this a temporary phenomenon, arguing that the structural problems in the Chinese economy were much deeper.
While FPIs were bearish on India in October, domestic institutional investors held firm. Vijayakumar expects that this trend of FII sales and DII purchases is likely to continue in the near term.
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(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)
