- Wealth PMS (50L+)
Today the FIIs went into sell mode for the Year: If you add up the net purchases for the year 2010, we are now at –1,637 crores. Domestic Institutions in the same period have bought 14,724 crores.
It must be said that this is not a big deal – in February we were in net sell mode till they started the massive post-budget purchases of Indian stock. Since March 15, the cumulative net purchases have been positive.
FIIs have been continuously selling this week, and have net sold about 9,900 crores this week or about $2 billion. DIIs on the other hand have purchased 4,100 crores. The rupee has crashed to nearly 47 to a dollar from about 45.2 a week earlier, a near 5% fall. Notice how no one complains that imports have become more expensive, but when it falls 5% they get all psyched out about exporters losing money, and exports are just 20% of our GDP. Such is life.
The US markets have recovered after the Dow briefly went below the 10,000 mark. As I write, it’s up 50 points, but it’s very volatile. Why are FIIs withdrawing in droves? Is the Greek crisis new? No. Is the Euro problem new? No. Is it because the US passed a bill regulating banks and they are concerned they’ll have to stop trading? That is a joke; the US government will eventually bow to the banks and lick the very ground they walk on.
Because there seems no credible reason, it looks easy to predict a bounce back. But there is this instinctive feeling this fall has more to it than just random selling. There is more to it than we read today – the price seems to say a lot more than we’re hearing. Don’t ask me why, this one I can’t quantify. But like all instincts, I’m prone to serious wrongness.Nearly flat on trading, and very light, so I can’t even say I benefit much either way.