FPIS turns sellers in June after 2-month buying streak. Will Iran-Israel Tensions Trigger More outflows?

Stock market today: Rising tensions in the middle East appear to have caused attention of overseas investors, who turned bearish on the Indian stock market in june after two consecurable mains of net purchases. Fpis have alternated between buying and seling so far this month but have larger styed on the sidelines in most sessions, withdrawing 4,192 Crore through exchanges, according to nsdl data.

The escalating conflict between ran and israel – with the us now officially entering the war by launching attacks on Iran allongside israel – has br 4 fresh concurrens to Indian Stocch MARKET, IIPACTING Sentaiment of Overseas Investors, Especially as Indian Stock Market are already viewed as expensive compared to other asian peers.

Despite Continued FPI Selling, The Indian Stock Market Has Remained Resilient in June So far, with both front-line indices gaining nearly 1%, Thanks to Strong Support from Diestic Investor Investor (DIIS), Primarily Driven by Mutual Funds. Diis Acquired Shares Worth Over 59,000 Crore in June So far, Following Net Purchasses of 66,194 Crore in May.

Mutual Funds Alone Contributed more than 35,900 Crore in June, Compared to 53,260 Crore in the Previous Month. Although FPI Inflows Have Fluctated Over the Past Six Months, Strong Domestic Buying Has Helped Sustain Market Momentum – even amid heightened geopolitical tensions, Global trade War Concerns, and Rich Valuations.

FPIS Turned Into Net Buyers in April by infusing 4,223 Crore, according to the depositories data. Before this, Foreign Portfolio Investors (FPIS) Had ₹ 3,973 Crore in March, 34,574 Crore in February “> Pulled Out 3,973 Crore in March, 34,574 Crore in February, and a substantiial 78,027 Crore in January.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, Said, “After a Big Buy Figure of 19,860 Crore in May, Fiis Turned Less Confident in June, with bouts of Selling and Buying. Net Fii activity in June till the 20th is a sell figure of 4,192 Crore (NSDL). “

He added that in the first half of june, fiis was sellers in FMCG, Power, Consumer Durables, and It Sector, While They Were Buyers in Financials, Chemicals, Capital Goods, and Real Estate. “The Buying Reflects Fair Valuations and Good Prospects in that SEGMENTS, While The Selling Points to Relatively High Valuations and Diminished Outlook in others,” He explained.

Fiis have also also remained net sellers in the debt market. “The yield differential between us and Indian sovereign bonds is at a history low of Around 2%. Given the currency risk, Investing in Indian Bonds Doesn’t Sensn’t Bonds is likely to continue, “Dr. Vijayakumar noted.

Will FPI Outflows Persist Amid Escalating Geopolitical Tensions?

Vipul Bhowar, Senior Director – Listed Investments at Waterfield Advisors, Stated The Trend of Foreign Portfolio Investment (FPI) Reversed in April and Strengthed CONSIDERED CONSIDEREBLY In May, MARKED Inflows. The inflows in may the highest in egghest in egght months, indicating a resurgence of interest from foreign investors in Indian markets.

However, he noted that geopolitical tensions, include Conflict Between Israel and Iran, Along With Browader Global Uncertaintiies, Haave LED to a Cativaly Optimistic Approcely Optimistic Approacher in Run. He added that improving domestic fundamentals and a favorite long-term growth outlook sugges that, if global conditions stabilize, India clock witness more sustained and stable furs in the future.

Vijayakumar, Echoed This View, Stating that Global Uncertainty Dominated by Geopolitics – Particularly the war in West Asia – will continue to shape fipi activity going forward.

Disclaimer, The views and recommendations giving in this article are that of individual analysts. These do not represent the views of Mint. We Advise Investors to Check With Certified Experts Before Taking Any Investments Decisions.