Foreign portfolio investors (FPIs) have sold Indian equities worth $19 billion since October 2021 as rising prices of crude oil and steep valuation of the markets made them jittery, although there’s a buy-in on the structural India growth story, said a recent note by Jefferies, which met with around 50 fund houses across Singapore and Europe.
Since October, FPIs have broadly reduced India weightings by 50-100 bps. The outflow has primarily been due to valuation concerns. Most investors were surprised with the market resilience despite oil worries and ensuing twin deficit concerns.
According to the report, investors have four other key concerns. While expected earnings cuts are on their minds, the same is largely visible in six sectors (autos, staples, durables, cement, pharma and industrials) which account for about 35% of the market weight.
