October witnessed a continuation of the Foreign Portfolio Investment (FPI) selling trend that commenced in September.
While November has seen a reduction in selling intensity, V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told news agency IANS that the trend persists without signs of reversal. FPI selling reached Rs 5,805 crore by November 10, according to NSDL data.
Interestingly, FPIs maintain a selling stance in financials despite robust Q2 results and promising future prospects. Amidst this uncertain climate, FPIs are opting for the security of risk-free US bond yields, with the 10-year yielding approximately 4.64 percent.
The prolonged FPI selling in financials has led to attractive valuations for banking stocks, presenting an opportunity for investors with a horizon of two years or more. Anticipating a market rally in the lead-up to the General elections, Vijayakumar suggests that leading banking stocks hold the potential to outperform during this imminent upswing. This insight positions banking stocks as a favorable investment choice during this period of market dynamics.
(With agency inputs)
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