FIIs dump ₹66,600cr in equities: What triggered the January sell-off?
What's the story
Foreign Institutional Investors (FIIs) have maintained their aggressive selling spree in the Indian equity markets throughout January. According to data from the National Securities Depository Limited (NSDL), they have sold equities worth a staggering ₹66,602 crore in the cash market till January 24. The trend has largely been driven by macroeconomic factors such as a robust US Dollar and rising American bond yields.
Sectoral impact
FIIs' selling spree impacts financial sector
The financial sector, which constitutes a major chunk of FII portfolios, has been the worst hit by the sell-off. Meanwhile, the IT sector has shown some resilience to the trend. V K Vijayakumar, the Chief Investment Strategist at Geojit Financial Services said that possible buying interest in the IT sector is attributed to better prospects and positive management commentary. He even predicted that the IT segment could see more investments in the future.
Market fluctuations
Indian markets face volatility due to FIIs' selling
The aggressive selling of Indian equities by foreign investors has caused severe market volatility and may pose challenges for domestic investors. On January 24, the Sensex dropped 0.43% to end at 76,190.46 while the Nifty fell 0.49%, ending at 23,092.20 amid continued foreign investor selling, weak corporate earnings, and slowing economic growth. The broader market witnessed sharper losses with BSE MidCap and SmallCap indices falling 1.6% and 2.2%, respectively.