New Delhi, Jan 18,2024: Foreign portfolio investors recorded their highest-ever single-day selloff on January 17, as they turned net sellers of Indian equities after two days. FPIs offloaded equities worth Rs 10,578.1 crore, according to provisional data from the National Stock Exchange. The previous highest-ever single-day selloff was Rs 9,691 crore, on November 3, 2017, says Deepak Jasani, Head of Retail Research, HDFC Securities.
World stocks and bonds took a hit on Wednesday as central banks pushed back against interest rate cut bets, while signs of a patchy economic recovery in China drove shares in the world’s second-biggest economy to their lowest in almost five years. The Indian government on Wednesday said it will sell a 3.5 per cent stake in power producer NHPC at a floor price of Rs 66 a share, which will garner Rs 2,300 crore to the exchequer over January 18-19, he said.
Asian equities were mixed Thursday after US stocks and Treasuries fell as strong retail sales data cast fresh doubt on the prospect the Federal Reserve will cut rates in March.
Nifty ended sharply lower on January17, marking the biggest intraday fall since June 13, 2022, due to panic selling across the board led by Bank shares. At close, Nifty fell 2.09 per cent or 460.4 points at 21571.9. Nifty fell on January 17 with a down gap, forming a bearish island reversal pattern. On a downward breach of 21,449, Nifty could head towards 20,977 over the next few days, while 21,851 could act as a resistance. The broader market has not seen panic selling. Once we observe that happening the sentiments could deteriorate fast and down move could accelerate, he said.
At elevated valuations the market needs only a trigger for a sell-off and on Wednesday this trigger came in the form of HDFC Bank’s worse-than-expected results, says V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
It is also important to understand that there was a sell-off in other emerging markets like Taiwan and Korea indicating that this is an emerging market correction driven by FPI outflows, he said.
The FPI sell figures in India on Wednesday was huge at Rs 10,578 crore. In the context of rising bond yields in the US, FPIs may sell again. But this is likely to be countered by DII buying in fairly valued large caps with growth potential, he added.
Investors may wait and watch for this turbulence to subside. The resilience in IT stocks in this crash is an indication of the strength of the sector. Apart from IT, large caps like RIL, ICICI Bank, L&T and Bharti have strength to tide over this turbulence. Further dips in HDFC Bank will provide buying opportunities for long-term investors, he added.
BSE Sensex is down 330 points on Thursday trading at 71,170 points. Top losers are Asian Paints, NTPC, HDFC Bank, Powergrid down by 2 per cent.