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Below is quote on FPI By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The distinctive feature of stock market performance this year,so far, is India’s underperformance with Nifty down by 1.4% YTD. In contrast the Taiwan index is up by 8.3 % and Shanghai composite is up by 3.4%. The principal reason for this variation in performance is the FPI outflows from India and inflows into other emerging markets like China, Taiwan, Hong Hong and South Korea. Outflows from India have been triggered mainly by the high valuations in India and inflows into other markets have been triggered by their relatively cheaper valuations. The opening up of the Chinese economy and improving prospects there has played an important role in the massive flows to China. An important recent trend is that FPI selling has reduced significantly and FPIs have even turned buyers in some recent days.

It appears that the sustained selling in India witnessed from early January is over; but they might sell again at higher levels. FPIs have been buyers in autos and auto components and construction. They were sellers in banking and financial services in which they are sitting on good profits.

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