FPI Selling Bias: Low Confidence in the Indian Economy? 😕

• In the first 3 days of June, FPIs have sold Rs. 2200 crores of equities in the Indian stock market
• This is in continuation with the already existing net seller position of FPIs from the past 9 months
• At the market's peak in October 2021, the average traded volume was more than Rs 4,000 billion. However, by May 2022, it had shrunk to less than Rs 2,800 billion.
• Similarly, the number of trades performed on the NSE in October 2021 exceeded 130 billion, but only 108 billion deals were executed in May 2022.
• The number of shares traded on the NSE in October 2021 was 83.58 billion shares. In May 2022, the figure had dropped to 43.91 billion, or about half of what it had been in October 2021.
• There are a combination of domestic and international factors contributing to this selloff
• Internationally, the Russia-Ukraine war and monetary policy tightening by the US Fed are at play
• Domestically, the rate hike by RBI, slashes In the economic growth forecasts and unsatisfactory corporate results have been at play

Expectations from the coming week😮
• RBI Monetary Policy Committee can do a hike in interest rates to combat the inflation
• If the stance of RBI turns strict monetary policy tightening, then the market mood can turn bearish

The longer-term story of the Indian economy is quite positive, however what do you think about the current jerk being witnessed?