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FPIs have reversed their selling strategy in India. Decline in US bond yields and the resilience of the Indian market have forced the FPIs to halt their selling, he said.

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.

In October, FPIs have sold equity for Rs 20356 crore. The selling through exchanges has been higher at Rs 25575 crores, he said. 

The primary reason for the sustained selling was the sharp spike in US bond yields which took the 10-year yield to a 17-year high of 5 per cent on October 19. If the safest asset class in the world, the US bond, yields around 5 per cent it is rational for FPIs to take out some money.

The market had not positioned itself for the US 10-year bond yield at 4.95 per cent and, therefore, this unexpected spike in yields will take its toll on equity markets, he said.

According to NSDL data, FPIs sold equity for Rs 13,652 crore through the stock exchanges through October 13.

India continues to be on top of emerging economies in attracting FPI this year but September witnessed selling and October has begun with the same trend. In the first four days of October, FPIs have sold stocks for Rs 9,412 crore in the cash market, he added. FPIs have been selling in financials, power, IT and oil and gas.

This sustained selling has been in response to steady dollar appreciation which took the dollar index close to 107 and the steady rise in the US bond yields which took the US 10-year bond yield to around 4.7 per cent.

The Finance Ministry, which revises interest rates for small saving schemes after every quarter, announced the new rates on Friday for the period between October 1 and December 31, 2023.

In a stock exchange filing, Saregama mentioned that is paying about $20 million for a 51.82 per cent stake in Pocket Aces and plans to invest an additional $1.8 million in the startup.