Bull Run Loses Steam as FPIs Go on Selling Spree

Bull Run Loses Steam as FPIs Go on Selling Spree

MUMBAI: Indian stock indices slid 1% on Monday led by heavyweight Reliance Industries Ltd, which dropped 5% after the conglomerate’s revenue from oil and chemicals declined in the December quarter. Foreign portfolio investors (FPIs) extended their selling to a second day, raising concerns that the strong bout of inflows that pushed the market to record highs could be over for the moment.

The Sensex fell 530.95 points or 1.1% to close at 48,347.59 and the Nifty declined 133 points or 0.93% to close at 14,238.90. The market is shut on Tuesday on account of Republic Day. Last week, the Sensex, which had crossed the 50,000 mark for the first time ever, touched an all-time high of 50,184.01. The Nifty had also hit a record high of 14,753.55 last week. Since then, both indices have declined about 3.5%. “The market is correcting due to profit booking. The general run-up has been quite fast,” said A Balasubramanian, CEO, Aditya Birla Sun Life Asset Management Co.

Most Asian markets ended strong on Monday with Hong Kong’s Hang Seng gaining 2.4% and South Korea’s Kospi firming up 2.2%.

At home, FPIs offloaded Indian shares worth 765.3 crore on Monday after selling to the tune of 635 crore on Friday. Domestic institutional investors (DIIs) sold shares worth 387.8 crore on Monday. Since November, FPIs have been the mainstay of the markets even as DIIs have been dumping shares.

So far in January, overseas investors have pumped 22,500 crore into equities. With foreign fund flows reversing in the past two days, markets are showing signs of weakness. Balasubramanian does not expect a “deep correction” from current levels, especially ahead of the budget on February 1.

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