FIIs shed over $2 billion in equities in 7 Sessions, Investing in Japan

During the initial seven sessions of May, foreign institutional investors (FIIs) opted to shed over $2 billion in local equities, showing a cautious approach amidst the ongoing election season. This move was aimed at minimizing potential risks, as they further decreased their equity exposure. Data from the National Securities Depository Ltd. revealed that FIIs sold approximately $800 million in domestic equities between May 2 and May 7.

Provisional data from the National Stock Exchange of India indicated that on May 8 and May 9, FIIs offloaded Rs 6,669 crore and Rs 6,994 crore respectively. In total, they have been net sellers of about $568 million so far in 2024, contrasting with their buying spree of shares worth $21 billion in 2023. According to Vinit Sambre, Head-Equities at DSP Mutual Fund, foreign investors are taking advantage of recent Indian market rallies ahead of significant events that will shape future trends. This trend of selling isn’t confined to India alone; FIIs have also been divesting in major global markets, with the exception of Japan and South Korea. The strengthening of the dollar presents an opportunity for FIIs to withdraw from emerging markets, including India. This raises speculation about whether FIIs are pulling out due to concerns about the stability of the Indian market or if they are waiting for election outcomes before reallocating funds.