"As per NSDL data on 3rd December, FPIs have sold equity worth Rs 8259 cr. FPIs have been selling continuously from November 23 onwards.
Stretched valuations, Fed's observations on accelerating tapering and concern on inflation and the potential impact of the Omicron variant on economic activity and corporate earnings are the factors influencing FPI activity. In early November many large foreign brokerages had downgraded India from overweight to neutral on stretched valuations. Even after the recent correction, Nifty is trading at 20 times FY23 earnings, which is much higher than the historical average of around 16. So, FIIs may continue to sell, though at a subdued pace. Since the risk appetite of retail investors and DIIs continues to be high and FPI selling is easily getting absorbed, this need not result in a sharp correction in the market"
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