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Below the Quote on FII flows by Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments  Ltd

"After a big buy figure of Rs 19860 crores in May FIIs turned less confident in June with bouts of selling and buying. The net FII activity in June till 20th is a sell figure of Rs 4192 crore (NSDL). 

In the first half of June, FIIs were sellers in FMCG, power, consumer durables and IT. They were buyers in financials, chemicals, capital goods and realty. The buying reflects the fair valuations and good prospects in these segments. And the selling reflects the relative high valuations and diminished prospects in those segments. 

FIIs continue to be sellers in the debt market. The yield differential between U.S. and Indian sovereign bonds is at a historic low of around 2%. Given the currency risk, it doesn’t make sense to invest in bonds and, therefore, this trend of FPI selling in bonds is likely to continue. 

Given the global uncertainty dominated by geopolitics, particularly the war in West Asia, FPI activity will be in response to the geopolitical developments."

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