U.S. dollar and Indian rupee banknotes. (Photographer: Dhiraj Singh/Bloomberg)

What Foreign Investors Bought And Sold In October

Foreign investors remained net sellers for the second consecutive month due to a weak rupee, liquidity shortage and spree of defaults by the IL&FS group.

Overseas investors pulled out more than $3.9 billion (around Rs 38,900 crore) in the equity markets in October, with outflows totaling $2.5 billion in the month’s first 15 days, according to National Securities Depository Ltd. data. The selloff eased in the remainder of the month.

The rise in oil prices scared investors the most last month, said G Chokkalingam, founder and managing director of Equinomics Research & Advisory. “The weakening rupee and the diminishing confidence in investors’ minds at sectors where they had a good exposure added to the woes further,” he told BloombergQuint in an interaction.

How Foreign Investors Played Indian Equities

Foreign investors infused about $134 million in pharmaceuticals and biotechnology stocks last month—of which $104 million came in its last 15 days.

The pharma sector was a beaten down sector, Chokkalingam said. “The weakening rupee and the confidence emerging on clearance of facilities by the regulators added advantage to the gains in the stocks.”

The financial sector was the worst hit, with investors selling stocks worth over $1.1 billion—of which banks contributed about $1.08 billion. The software and services sector came next, with outflows of $919 million, followed by oil and gas, and automobile and ancillary components companies.

India witnessed foreign fund outflows of over Rs 95,000 crore this year, of which nearly Rs 41,900 crore was from the equity markets.

The benchmark NSE Nifty 50 ended October at 10,250.85, a 12 percent fall from its August peak as higher crude prices and a weakening rupee threatened to widen India’s trade and current account deficits.