Experts upbeat on stock market despite FPI Selling

New Delhi [India], August 18 : Despite the continued stock selling by Foreign Portfolio Investors (FPIs) in August so far, the stock market experts have expressed a positive outlook for the market opening in the upcoming week starting from Monday.

According to the market analysts, the market will be driven by favourable global cues and domestic economic data such as the HSBC India Manufacturing PMI and HSBC India Services PMI.

The upcoming week is particularly important because the FPIs have sold net equities worth Rs 21,201 crore during August.

Foreign investors have been reducing their exposure to Indian equities by selling equities worth Rs 7,769.73 crore in just the last week (August 12 to 17).

This activity has caused their net investment for August to turn negative, signalling a shift in the investment.
"For India, the one issue is continued FPI selling which has taken out nearly USD 2.8 billion from the cash equities segment this month so far. We remain positive on the Indian markets and expect a move up," said Ajay Bagga, Market and Banking expert.
"We remain positive on the Indian markets and expect a move up," he added expressing his optimism in the upcoming trading days.
Interestingly, at a time when overseas investors were net sellers in Indian equities, domestic institutional investors remained net buyers, largely compensating for the outflows by foreign investors.
According to NSE data, the net gross purchase by domestic investors (DIIs) in August stands at Rs 34,060.09 crore.
The benchmark indices witnessed a strong rally on the last trading day of the previous week, with both the NSE Nifty 50 and the BSE Sensex posting significant gains. On Friday, August 16, the Sensex increased by 1,330.96 points, or 1.68 per cent, to complete the day at 80,436.85, while the Nifty 50 at the National Stock Exchange (NSE) soared by 397.40 points, or 1.65 per cent, to close at 24,541.15.
Market analysts say that the stock markets have responded impressively to global risks in the past few months and will be reacting positively in the upcoming week due to the indication of favourable US economic macroeconomic indications.
"The recent economic data reinforcing expectations that the Federal Reserve will soon lower interest rates. The market will also closely watch various Fed Officials' commentary to take further clue regards to their views on Interest rate trajectory, economy and Inflation," a market commentary by Pantomath Capital Advisors Private Limited added.
Among the key sectoral indices, IT saw significant gains, followed by realty and auto, while energy and metal sectors ended in the red. The broader indices also managed to recover losses, with the midcap index gaining nearly a per cent and the smallcap index finishing almost flat.
"With the earnings season concluded, attention will now shift to global markets for cues, particularly in light of the notable recovery in US markets, which has eased recession fears," said Ajit Mishra - SVP, Research, Religare Broking Ltd.
"Domestically, market participants will be watching institutional flows and upcoming economic data, such as the HSBC India Manufacturing PMI and HSBC India Services PMI, for direction," he added.