Russia Ukraine War: Investors lost Rs 10 lakh crore, 9 out of 10 shares bled

Foreign investors are selling sacks of shares, selling of Rs 2 lakh crore since October, understand from experts


Share Market Update: Foreign investors are continuously selling from the Indian stock market. Or just say Bora-Bora are selling shares. The selling of foreign investors started from October, even after five months, it is not taking the name of stopping. Since October last year, over Rs 2,00,000 crore has been withdrawn from the domestic stock markets due to continued sell-off by foreign portfolio investors (FPIs).

The Russia-Ukraine conflict has added to the panic of FPIs, which are already prepared to hike interest rates by the US Federal Reserve. On March 4, FPIs had pulled out Rs 7,631 crore from the stock markets. The last three sessions of March took the total withdrawal to Rs 18,614 crore. Russia intensified its attacks on Ukraine and oil prices increased, so selling also increased.

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This sell-off came after a withdrawal of Rs 45,720 crore in February and Rs 41,346 crore in January. With this, FPIs have withdrawn Rs 2,06,646 crore (excluding FPI investments in IPOs) with effect from October 1, 2021.

bad condition of rupee
Despite the intervention of RBI, the position of the rupee against the dollar is thin. The FPI pull-out affected the rupee with the rupee falling below the 76 level to 76.16. Analysts say that if the situation in Ukraine worsens and FPI selling continues, then the rupee will cross the level of 77 against the dollar in the coming days. A banking source said that while banks are buying dollars to facilitate exit of FPIs, RBI is selling dollars from its forex kitty to save the rupee.

domestic investors buying
However, domestic institutional investors (DIIs), led by LIC, mutual funds and insurance companies, are increasing their purchases. So the FPI selling has had little effect.

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Countering the FPI strategy, DII has invested Rs 12,599 crore in March 1-4. This adds up to their total investment of Rs 1,42,872 crore since October 2021. DII invested a record amount of Rs 42,084 crore in February, which is their highest monthly investment since then. 55,595 crores in March 2020 when the Kovid epidemic knocked in the country.

FPI seller for about 6 months
Vineet Bagri, Managing Partner, TrustPlutus Wealth, said that global markets are scared of events happening in Europe, which are creating volatility. FPIs have been sellers for almost 6 months. With the withdrawal of FPIs, the sentiment in the equity and forex markets is weakening. Their impact on the markets is visible, with an increase in volatility and a fall in equity prices. However, the fact that this sale by foreign investors has been absorbed by domestic investors, bodes well for the outlook for the Indian markets.

Tags: FPI, market cap, Share market, Stock Markets, Stocks


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