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After sustained buying for three months, FPIs have turned sellers in the Indian market, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

During the last seven trading sessions FPIs sold stocks worth Rs 8,545 crore in the cash market. Sharp spike in the US 10-year bond yield above 4 per cent is a near term negative for capital flows to emerging markets, he said.

During the last three months, FPIs have been sustained buyers in the Indian market having invested a cumulative amount of Rs 1,37,603 crore.

If the US bond yields remain high FPIs are likely to continue selling or at least refrain from buying, he said.

FPIs continued to buy autos, capital goods and financials. A significant change in FPI strategy  is that they have started buying IT stocks, which they have been selling earlier. This explains the strength in IT stocks recently, he added.

Domestic equities saw some respite after witnessing selling pressure for three consecutive days on the back of India’s services activity rising sharply to 62.3, its highest in 13 years, fueled by strong demand, says Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.