Foreigners turned sellers of Indian shares for the first week in 15, breaking a buying streak that helped push the country’s key stock gauges to all-time highs in July.
(Bloomberg) — Foreigners turned sellers of Indian shares for the first week in 15, breaking a buying streak that helped push the country’s key stock gauges to all-time highs in July.
Global funds sold $238.8 million of shares last week, marking their first weekly selling since April 21, according to data compiled by Bloomberg. The strategy change coincided with a global equity selloff, triggered after Fitch Ratings’ downgrade of the US sovereign rating spurred rallies in Treasury yields and the dollar.
India’s benchmark Sensex surged to a record high in mid-July, gaining more than 17% from a March low. It’s down about 0.9% this month.
“A lot of foreign money has gone into small- and mid-cap stocks, and the recent selling is more of taking profit from stocks that are looking overheated,” said Abhay Agarwal, fund manager and founder of Piper Serica Advisors Pvt.
For this year through Aug. 4, foreigners have bought $15.2 billion of shares, just short of reversing their net selling in 2022.
The recent consolidation indicates “rational behavior,” but bull-market frenzy is visible in the small- and mid-cap indexes, which have outperformed benchmarks by a significant margin, according to ICICI Securities analyst Vinod Karki.
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