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 The spike in US bond yields triggered by the higher-than-expected consumer price inflation led to sustained selling by FPIs in the cash market, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

In February through 16th, FPIs had sold equity worth Rs 6112 crores through the exchange. But buying through ‘the primary market and others’ reduces the net sell figure for February through 16th to Rs 3775 crores. For the year 2024, the total FPI selling stands at Rs 29519 crores, he said.

The trend of FPI selling is likely to continue so long as the US bond yields remain elevated. The sustained FPI buying in debt which started early this year also continues. FPIs bought debt for Rs 16559 crores in February through 16th taking the total buy figure for debt for 2024 to Rs 36395 crores.This trend is also likely to continue, he said.

The selling by FPIs in equity would have been much higher in response to the rising US bond yields. But FPIs have been consistently losing the tug of war with DIIs and, therefore, they are a bit reluctant to press aggressive selling. They will have to buy the same stocks later which they have been selling when conditions are favourable for buying, he added.