The pressure in the Indian stock market continued on Wednesday as both the benchmark indices opened in the red, weighed down by persistent selling by foreign investors.
The higher US interest rates and a cautious risk appetite among foreign investors are also resulting in continuous pressure on the Indian Rupee. Experts believed that the rupee's weakness is being reinforced by deteriorating trade fundamentals.
Foreign institutional investors (FIIs) have shown a clear preference for debt instruments over equities during the past one year, according to a recent report by the State Bank of India (SBI).
Foreign investors continued to pare their holdings in select defensive sectors such as energy and consumer staples, while increasing exposure to cyclical and growth-oriented segments like transportation, telecom, and healthcare, according to a report by Elara Securities.
After several weeks of persistent selling, foreign investors turned net buyers in the Indian markets this week, marking a positive inflow of Rs 1,751 crore between October 6 and October 10, according to data released by the National Securities Depository Limited (NSDL).
India's export sectors, particularly services and manufacturing, offer significant untapped potential for foreign investors, according to Franziska Ohnsorge, Chief Economist, South Asia Region, World Bank.
Madhya Pradesh Chief Minister Mohan Yadav said on Sunday that he would pitch his state to foreign investors during his visits to Dubai and Spain. The chief minister will leave for Dubai on Sunday afternoon.
Puri emphasised that as India's business interface with the rest of the world grows, it is crucial for companies to be properly audited to attract foreign investment.
Foreign portfolio investors (FPIs) made a net investment of Rs 13,107.54 crore into Indian markets during the week of June 23 to June 27, according to data released by the National Securities Depository Limited (NSDL).
Foreign investment in the Indian equity market remained positive during the week from June 16 to June 20, though the net inflows declined compared to the previous week, as per the latest data released by the National Securities Depository Limited (NSDL).