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An important trend in FPI activity is the big selling in the FMCG segment and big buying in telecom and realty, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

There have been big swings in US bond yields this year in response to expectations regarding rate cuts by the Fed. The year started with the market discounting six rate cuts in 2024 and consequently, the yields drifted down. Then the market started factoring in only three rate cuts since the US labour market continued to be tight, he said.

Now many experts think that there may be only two rate cuts and these will be backloaded in 2024. Consequently, the US 10-year yield has spiked to 4.4 per cent. This will impact FPI flows into India in the near term, he said.

However, FPI selling will be limited despite the high US bond yields since the Indian stock market is bullish and has been setting new records consistently, he said.

Domestic institutional investors (DIIs) recorded the eighth consecutive month of inflows in March 2024 at $.8 billion, the highest since April 2020, Motilal Oswal Financial Services said. FIIs too recorded strong inflows of $4 billion in March 2024