By Siddhant Mishra
The first eight trading sessions of 2023 have seen outflows by foreign institutional investors (FIIs) continue, with $817.58 million being offloaded from equities between January 2 and January 10, according to Sebi data. FIIs sold a provisional `3,208.15 crore ($392.6 million) of shares on January 11, according to data from the National Stock Exchange. This takes the total amount withdrawn by FIIs until January 11 to $1.21 billion.
Agrees Deepak Jasani, head of retail research at HDFC Securities, saying that the outflows are a reflection of new year allocations getting deferred. “With the US Fed not moving away from its hawkish stance and China gradually re-opening, there are contrary signals as regards global appetite. “Many who bought in anticipation are also getting out, primarily because of the key triggers ahead — the upcoming Budget and US Fed meet, both on February 1.Many short-term FPIs have withdrawn money, and will come back later once there is clarity,” he said.
He added that while the rupee has recovered to below the 82-mark, the weakness could have caused some panic among FIIs in the initial sessions. Foreign Institutional Investors (FIIs) withdrew over $16 billion from Indian equities in 2022, turning net sellers for the first time in four years. This was despite India being the second-best performing market in the world in 2022, with the Sensex and Nifty raking in gains of over 4% each.
Brokerages have, in their outlook for 2023, said FII flows are expected to remain volatile. BoFA Securities, in its outlook, had said that with valuations at a 10% premium to their long-term average, FII inflows could stay volatile. The brokerage had cited a slowdown in the US and global economy, the Fed pivot, a strengthening yuan, higher crude, and reopening in China, along with geopolitical uncertainties such as Russia-Ukraine and China-Taiwan, as key events to watch in 2023.