New Delhi: As long as Brent crude remains above $100 a barrel, there will be pressures on the economy and the foreign portfolio investors (FPIs) are likely to sell the dip, analysts said on Sunday.
The total FPI selling in October stands at Rs 53,337 crore so far, and the net FPI investment through the IPO market during this period stands at Rs 5,281 crore.
“The total FPI selling through the exchanges for this year stood at Rs 3,69,164 crore,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.
On the flows front, FIIs remained net sellers for the 10th straight week. For the week ended October 23, FIIs significantly reduced their selling and even turned buyers on two days.
The moderation in US bond yields with the 10-year yield declining from 5.36 per cent to around 5 per cent, appreciation in the rupee to 94.94 to the dollar and the low valuations, particularly of the large-caps, contributed to the moderation in FII selling.
Going ahead, the steady moderation in FII selling offers some comfort, though elevated crude and sharp broader-market weakness keep the downside risk alive.
A significant market trend during the week was the sharp correction in the mid-and small-caps.
The Nifty Mid-cap 100 plunged 5.6 per cent and the Nifty Small-cap 100 crashed 7.3 per cent during the week while the Nifty 50 was relatively resilient with a cut of only 2.35 per cent.
Forced liquidation in the margin-funded long positions in the broader market is rumoured to have triggered the crash in the broader market, said analysts.
The resilience of the large-caps is mainly due to the accumulation of the fairly valued large-caps by the DIIs which are flush with funds.
The high crude prices is acting as a strong headwind for the economy and market, said analysts.
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 "FPI selling stands at Rs 53,337 Cr in Oct; elevated crude prices weigh on economy")
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