Indian stocks decline for second straight day over selloff by foreign investors

New Delhi [India], January 11 (ANI): Indian stock indices have extended losses for the second straight session, largely due to continued selling by foreign investors on concerns over higher stock valuations.
At 0949 IST, Sensex traded at 60,046.81 points, down 68.67 points or 0.11 per cent, whereas Nifty traded at 17,896.95 points, down 17.20 points or 0.096 per cent.
On Tuesday, the indices gave up their accumulated gains from the previous session and traded in the red throughout the session
"The biggest drag on the market in the near-term is the sustained selling by FIIs for thirteen continuous sessions...," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
So far in 2023, foreign investors have pulled out stocks worth Rs 8,491 crore from their India investment, the latest data from National Securities Depository Limited showed.
In 2022, foreign portfolio investors overall sold Rs 121,439 crore worth of stocks in India on a cumulative basis, data showed.
"Higher valuations in India and attractive valuations in markets like China are nudging the FIIs to sell in India and move money to cheaper markets," Vijayakumar added.
Terming the ongoing selling by foreign institutional investors as a short-term challenge, Vijayakumar believes it can turn out to be an opportunity for long-term investors.
Last year, when FIIs sold heavily in Indian markets, domestic institutional investors and retail investors had notably purchased almost the same amount of stocks, which helped them make large profits.
Meanwhile, the US stock markets closed higher on Tuesday, erasing earlier losses to extend the new year's rally ahead of December consumer price inflation data scheduled for Thursday release.
In November, consumer inflation in the US moderated to 7.1 per cent, but still is way above the 2 per cent target.
"Stocks climbed on bets the upcoming consumer price index will show further softening, which could help build the case for the Federal Reserve to slow its pace of rate hikes," said Deepak Jasani, Head of Retail Research, HDFC securities. (ANI)