The data has been procured from the National Securities Depository Limited (NSDL).
“The sustained strengthening of the dollar and rise in US bond yields have been the principal factors driving the FII selling,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attributing this sustained selling to macroeconomic factors.
The strategic analyst further highlighted that the selling trend is likely to persist as long as two key global financial indicators remain elevated.
“So long as the dollar index remains above 108 and the 10-year US bond yield remains above 4.5%, the selling is expected to continue,” Vijayakumar noted.
The sell-off has particularly impacted the financial sector, which comprises a substantial portion of FII portfolios. However, the information technology (IT) sector has shown some resilience.Vijayakumar suggested that this potential buying interest in the IT sector is due to the improved sector prospects and positive management commentary.Going forward, the IT segment is likely to witness buying, he added.
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In the past few months, the FIIs have maintained a persistent selling trend in Indian markets, driven by global economic uncertainties, rising US bond yields, and dollar strength.
The massive sale in the Indian equities by the foreign investors has also resulted in significant volatility and potential challenges for investors in the market.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
