Amazon Pay Payment Gateway : Foreign investors sell Indian stocks violently!

The Indian stock market is experiencing a massive sell-off by foreign investors.

Preliminary data released by the National Stock Exchange of India (NSE) on 15 October showed that foreign investors were net sellers of shares worth Rs 373.16 billion (about Rs 3.15 billion) on 14 October, the 11th consecutive trading day of net selling. From October 1 to 14, foreign investors cumulatively sold Indian shares worth about Rs 621.26 billion (about Rs 52 billion) on a net basis.

Analysts point out that foreign investors' investment behaviour in the Indian stock market is undergoing a major change and the selling trend is likely to continue in the short term. The market is closely watching the data in the coming weeks and its impact on the stability and growth prospects of the Indian market.

The Indian rupee has continued to depreciate and hit a record low against the US dollar due to concerns of large foreign withdrawals from the Indian stock market. Traders are now keeping a close eye on the 84 mark, with analysts predicting that the Reserve Bank of India (RBI) may step up intervention if it falls below this level.

Preliminary data from the National Stock Exchange of India (NSE) on 15 October showed that foreign investors were net sellers of shares worth Rs 373.16 crore on 14 October, while domestic institutional investors were net buyers of shares worth Rs 227.81 crore.

A review of the previous data by CSJ revealed that foreign institutional investors have cumulatively sold Indian shares worth Rs 621.26 billion on a net basis from 1 to 14 October.On 3 October, global funds sold a record $1.85 billion worth of Indian shares on a net basis.

Reflecting the market levels, major Indian equity indices such as Sensex 30 and Nifty 50 have continued to fall in the recent past, with India's Sensex 30 accumulating a loss of 2.761 TP3T in the last one month.

It is noteworthy that domestic institutional investors in India bought against the market, buying shares worth Rs 607 crore from 1 to 14 October. Analysts point out that many funds, especially Life Insurance Corporation (LIC), tend to buy against the market when other funds are selling.

Analysts believe that the impact of foreign selling has been mitigated due to huge buying by domestic investors.VK Vijayakumar, chief investment strategist at Geojit Financial Services, said, "Massive foreign selling has not had a major impact on the market as all the selling has been absorbed by the domestic investors and they are continuing to inflows." He expects the trend of foreign selling to continue in the short term.

Some analysts believe that the current trend of foreign selling is influenced by a shift in investment strategies, with the market favouring investments in the Chinese market over Indian equities.

With a significant change in the investment behaviour of foreign investors in the Indian stock market, the market is closely watching the data in the coming weeks and its impact on the stability and growth prospects of the Indian market. Analysts believe that geopolitical developments and the future course of global interest rates will be key determinants of foreign investment flows into the Indian stock market.

The Indian stock market has attracted a large amount of foreign funds over the past period. Once the trend of foreign investment changes, there is a possibility of massive selling.

According to Citibank, foreign funds are accelerating their withdrawal from the Indian stock market, which is currently characterised by high valuations and poor corporate earnings, and now is the time for profit-taking.

The Indian rupee has continued to depreciate to a record low against the US dollar due to fears of a massive withdrawal of foreign capital from the Indian stock market.

On 14 October, the exchange rate of the United States dollar against the Indian rupee rose to 84.205, a record high.

Analysts pointed out that the main reasons for the depreciation of the Indian rupee are: 1) a large amount of foreign capital withdrawal from the Indian stock and bond markets; 2) market expectations that the RBI may soon reduce interest rates, the policy stance from the "exit of easing" to "neutral", leading to increased market bets on the The market expectation that RBI may soon reduce interest rates and shift its policy stance from "exit easing" to "neutral" has led to increased bets on interest rate cuts.

The Indian rupee has continued to depreciate to record lows this year, but the RBI's determination to maintain monetary policy stability has limited the exchange rate's range of volatility. Traders are now keeping a close eye on the 84 mark, with analysts predicting that the RBI may step up intervention if it falls below this level.

Shinhan Bank vice-president Kunal Sodhani said that despite RBI's intervention at 83.98 and 83.99 levels, outflows have been very strong, especially in the stock market. It will be important to observe the method of RBI intervention once the rupee falls below 84.

From RBI's point of view, it can maintain some foreign exchange competitiveness as long as exchange rate fluctuations are not too sharp, said Michael Wan, senior currency analyst at MUFG Bank.

India's foreign exchange reserves fell by $3.709 billion to $701.176 billion as of 4 October, the Reserve Bank of India said.

RBI's defence of the currency and measures to ease capital outflows from the stock market may provide some relief to the depreciation of the Indian rupee, said Amit Pabari, managing director, CR Forex.

The external pressure on the depreciation of the Indian rupee has come from a strong rebound in the U.S. dollar.On 14 October, the dollar extended last week's rally, with the ICE DXY Dollar Index rising 0.31 TP3T, erasing the losses of the last two months, while the Wall Street Journal Dollar Index also rose 0.41 TP3T, returning to the level of August this year.

In the news, the market is now betting that the Fed will maintain a gradual pace of interest rate cuts, supporting the dollar's strength. One of the Fed's most influential officials, Christopher Waller, suggested in his latest speech that future rate cuts will need to be "more cautious." Waller implied that future rate cuts will be smaller than September's sharp cut, which further increases the likelihood that the Fed will make a 25 basis point cut in November. The likelihood of a 25 basis point rate cut by the Fed in November is further increased.