Foreign Portfolio Investor Sell-Off Weighs on Indian Markets

On Friday, Indian stock markets faced pressure as Foreign Portfolio Investors (FPIs) offloaded their holdings, negatively impacting investor sentiment. At the time of reporting, the Nifty 50 slipped to 25,010.35, a decrease of 51.75 points or 0.21 percent, while the BSE Sensex saw a drop of 118.41 points or 0.14 percent, landing at 82,065.76.

Banking and market expert Ajay Bagga commented on the situation, saying, 'The current trajectory of Indian markets appears negative as per traded futures. FPIs are consistently selling, though Domestic Institutional Investors (DIIs) are attempting to offset this. The upcoming market action is critical in addressing the current trend of weak earnings and the absence of a US-India Trade deal.' Bagga further warned investors to brace for volatility, as determined Indian retail investors continue to support the market by purchasing during dips.

Reflecting broader market trends, NSE's major indices also faced declines. The Nifty 100 dropped by 0.53 percent, the Nifty Midcap 100 fell by 0.34 percent, and the Nifty Smallcap 100 lost 0.56 percent. Sector-specific indices painted a similar picture; Nifty Auto decreased by 0.66 percent, Nifty IT by 0.19 percent, Nifty Media by 0.40 percent, and Nifty Metal by 0.46 percent. Notably, Nifty Pharma was the sole gainer with a 0.26 percent rise.

Akshay Chinchalkar, Head of Research at Axis Securities, analyzed that the Nifty erased all its gains from Wednesday by decreasing 159 points, closing at 25,062. Chinchalkar pointed out that the formation of two consecutive bearish engulfing patterns is unusual and indicates that crucial support at 25,000 and resistance at 25,245 are pivotal levels. He highlighted the significance of surpassing 25,340 for a shift in market sentiment.

Global factors add to the cautious outlook, with US-China talks in Sweden set to influence US-India trade dynamics, especially concerning Russian oil. With an absence of fiscal intervention and the next monetary policy meeting scheduled for August 6, the Indian markets could end the week on a weak note, potentially marking a fourth consecutive week of declines. Asian markets also exhibited mixed performances, with Japan's Nikkei 225 down 0.79 percent, Singapore's Straits Times falling 0.48 percent, Hong Kong's Hang Seng declining by 1.19 percent, and Taiwan's Weighted Index marginally down by 0.08 percent. South Korea's KOSPI gained 0.35 percent, emerging as a rare regional positive.

(With inputs from agencies.)