India Stocks: Indian shares reverse gains as foreign outflows spur volatility

Avenue Supermarts

16/01/2023 08:46

(Updates levels)
    By Bharath Rajeswaran
       BENGALURU, Jan 16 (Reuters) - Indian shares reversed
gains on Monday on volatility due to extended foreign investor
selling and higher oil prices, which offset better-than-expected
earnings from the country's largest private lender HDFC Bank.
    The Nifty 50 index  .NSEI  was down 0.44% at 17,876.50 as of
2:11 p.m. IST, while the S&P BSE Sensex  .BSESN  fell 0.37% to
60,038.37. Both benchmarks had risen over 0.5% during the
session.
    Barring information technology  .NIFTYIT  and public sector
banks  .NIFTYPSU , all the other 11 major sectoral indexes
declined, with heavyweight financials  .NIFTYFIN  falling 0.8%
and metals  .NIFTYMET  losing 1.4%.
    The reversal in equities during the session almost mirrored
the downturn in financials  .NIFTYFIN , which gave away intraday
gains of 0.8% in a volatile session.
    "The volatility in markets will continue in the near term,
due to extended selling by foreign portfolio investors (FPI),"
said Siddhartha Khemka, head of research (retail) at Motilal
Oswal Financial Services. 
    Foreign selling in Indian equities is the result of high
domestic valuations and rising allocations to other markets such
as China and Taiwan, which were cut earlier due to COVID curbs,
three analysts said.
    They also flagged a moderation in domestic investors' buying
as another reason for volatility.
        Data showed FPIs have sold 150.68 billion rupees ($1.85
billion) worth of equities in 2023 so far.
    FIIs have been net sellers in each of the last sixteen
sessions, the longest in six months, according to NSE
provisional data. Since Dec. 23, 2022, they have offloaded
nearly 239 billion rupees. 
    This was when markets fell on fears of a surge in COVID
cases in China and inflation worries after the release of the
Indian central bank's December policy meeting minutes.
    Meanwhile, oil prices held near-2023 highs on optimism that
China's reopening will lift demand. High crude prices hurt big
importers like India, negatively impacting inflation and
government financials.  O/R     
($1 = 81.2950 Indian rupees)
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FIIs extend longest selling streak in six months    https://tmsnrt.rs/3XuvT4Y
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 (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio
D'Souza, Nivedita Bhattacharjee, and Janane Venkatraman)
 ((bharath.rajeswaran@thomsonreuters.com, Mobile:
+919769003463))