FPI outflow from equities was Rs 14,382.59 crore during this month while inflow was Rs 10,624.15 crore in debt segment
Amid selling pressure from the foreign portfolio investors (FPIs), coupled with weak corporate earnings results, the domestic equity market may continue its downward trend.
Although key benchmark indices closed nominally higher on Friday, analysts feel the market may fall for the fourth session today.
Overseas investors snapped their five-month buying trend in July as their net outflow from the capital markets stood at Rs 3,758.44 crore. As per the data available till July 26, FPI outflow from equities was Rs 14,382.59 crore during this month while inflow was Rs 10,624.15 crore in debt segment.
FALLING KNIFE
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- FPI outflow from equities was Rs 14,382.59 crore during this month while inflow was Rs 10,624.15 crore in debt segment
- For this week, the benchmark index is still overall weak on charts and could find support around 11100-11150 levels
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According to an analyst, who spoke on the condition of anonymity, the market sentiment may remain weak on account of consistent selling by foreign institutional investors (FIIs)/FPIs and dismal quarterly earnings.
"With no change on the surcharge on the super-rich, FII selling only gained pace. Markets will now keep a close watch on the global macros, Federal Open Market Committee meet on Wednesday, and on the remaining of the quarterly earnings. Though ICICI Bank has reported a strong quarter, it is to see how it pans out during the week as more quarter results are to come in. Auto stocks will continue to be in pressure until festive demand picks up in September onwards," the analyst said.
In June, FPIs infused a net Rs 10,384.54 crore, Rs 9,031.15 crore in May, Rs 16,093 crore in April, Rs 45,981 crore in March and Rs 11,182 crore in February into the capital markets (including both equity and debt).
According to Romesh Tiwari, head of research, CapitalAim, Nifty was bearish for the entire week. The index remained bearish below the 120-day moving averages on the daily chart. On Friday, Nifty traded mixed, but it managed to close at 11284.30 levels with nominal gains of 32.15 points, or 0.29%, on a daily basis.
"For the next week, the benchmark index is still overall weak on charts and could find support around 11100-11150 levels. The index is sustaining below the rising channel on the daily chart below the 120-day moving average and consolidating there within a narrow range of almost 200 points on the same chart. If the index sustains below 11200 levels, then further downward movements will be triggered," Tiwari said.
He said the rise in the geopolitical tensions in the Gulf region, combined with weakness in Indian currency against the US dollar, could keep the domestic market around the lower levels and crude prices are edging higher on concerns about supply disruptions. Besides, disappointing corporate earnings are also adding to the weakness of the benchmark index. Weak monsoon in the major parts of the country is also weakening the sentiments.
The broader indices underperformed more than the key benchmark indices, with midcap and smallcap indices losing over 8% and 6%, respectively, since July 1.
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According to an analyst, who spoke on the condition of anonymity, the market sentiment may remain weak on account of consistent selling by foreign institutional investors (FIIs)/FPIs and dismal quarterly earnings.
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