fpi: Sensex sinks 1,172 points on rate hike fears, FPI exits – Times of India

MUMBAI: The Dalal Street on Monday witnessed strong selling triggered by the raging inflation, which is stoking fears of a sharp rise in interest rates in India and abroad. This caused the sensex to close 1,172 points, or 2%, lower at 57,167 — the fourth consecutive slide for the index.
The rising number of Covid infections in some countries, resurgence of selling by foreign funds in India and the ongoing Russia-Ukraine war also weighed on investor sentiment, market players said. These factors have unsettled investors’ confidence, according to a note by Axis Securities chief investment officer Naveen Kulkarni.
Last week, the government had said that the inflation for March was almost at 7% — a 17-month high. After that announcement, analysts and economists predicted that the RBI may raise the rate of interest in its next policy meeting in June. During the day, the country’s largest bank SBI raised lending rates marginally, which market players feel is asignal for others to follow.
Monday’s slide on Dalal Street was led by Infosys, HDFC Bank, HDFC and TCS.

Together, these four stocks accounted for nearly 1,000 points of the sensex’s slide, BSE data showed. Market players said that below-expectations quarterly results by Infosys was the main reason for the sharp sell-off in the counter. After crashing 9% on the BSE, its biggest single-session slide in more than two years, the stock finally closed the day at Rs 1,621 — down 7. 3%. HDFC Bank and HDFC have been on a slide ever since the two announced a merger, which analysts feel will face several regulatory and operational hurdles.
Monday’s selling was led by foreign portfolio investors (FPIs) who recorded a net out- flow of nearly Rs 6,400 crore, BSE data showed. The day’s net sale figure took April’s total net FPI outflow figure into the negative territory. After six straight months of net sale by foreign funds till March, the first half of the current month had recorded some consecutive days of strong buying by this investor group.
However, with the cost of funds rising at a fast clip in most of the developed markets, foreign funds are again playing it safe and taking money out of emerging markets, including India, institutional dealers and analysts said. According to CDSL, so far in 2022, net selling by FPIs in the stock market is nearly Rs 1. 1 lakh crore.