FPI/FII: The relentless FPI selling has to be seen in the context of a steadily rising dollar and bond yields in US Says Dr. VK Vijayakumar, Geojit Financial
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Below is quote on FPI/FII 02th July 2022 by Dr. VK Vijayakumar, Chief Investment Strategist
"In June FPIs sold equity worth Rs 50145 cr through the stock market.( NSDL data) This takes the total FPI selling in CY 22 to Rs 223944 cr. This massive capital outflow has significantly contributed to the depreciation in INR which breached 79 to the dollar recently. The relentless FPI selling has to be seen in the context of a steadily rising dollar and bond yields in US.
FPIs are selling more in countries with rising current account deficits ( CAD) like India because the currencies of such countries are vulnerable to further depreciation.
Towards the end of June FPI selling has been showing a declining trend. If the market rises in July anticipating or responding to good Q1 results, FPIs may again sell. This trend will be halted only when the dollar stabilises and US bond yields decline"
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Trend reversal in FPI investment from buying in last 3 months to selling in Sep
