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Tuesday,12-August-2025
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Selloff 2022: Foreign Portfolio Investors (FPI) or Fair Weather Friends

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3 years ago

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The sharpest rate hike of 75 basis points since 1994 by the US Federal Reserve is the latest flashpoint in the global and Indian stock markets reeling under massive selling pressure of foreign investors.

Indian and global markets too slumped on Thursday over recessionary fear after the US Fed raised interest rates by 75 bps, the biggest increase since 1994. Further, Fed Chair Jerome Powell signalled another big move (50-75 bps hike) next month, intensifying its fight to contain rampant inflation.

It has sharply increased the interest rate target to 3.4 per cent for 2022 and 3.8 per cent for 2023, according to Motilal Oswal Financial Services.

Sorbh Gupta, Fund Manager, Equity, Quantum AMC, said in a note that May has seen FPI outflows of $5.17 billion. This has been the thirst worst month of FPI flows since FPI investments were allowed to invest in India in 1991.

“Interestingly, of the five ‘worst ever’ months of FPI flows, 4 have come in this calendar year. Domestic institutional investors (mutual funds and insurance put together) have been net buyers for May 2022 to the tune of $6.57 billion,” he added.

Equity investors who have invested in equity markets in the last two-three years have seen mostly positive returns and a swift recovery after every correction. The current volatility and slow grind of the markets will test their patience, Gupta said.

S&P BSE SENSEX declined by (-) 2.16 per cent on a total return basis in the month of May 2022.

It has underperformed developed market indices like S&P 500 (0.18 per cent) and Dow Jones Industrial Average Index (0.32 per cent). S&P BSE SENSEX has also underperformed MSCI Emerging Market Index (0.46 per cent). The broader market has been weaker, S&P BSE Midcap Index has declined by (-) 5.5 per cent for the month & S&P BSE Small cap Index declined by 7.8 per cent.

The power and metal sectors which have been hogging the limelight over the past few months were the biggest losers, falling by 11.3 per cent and 15.5 per cent, respectively. The BSE Auto Index was the only sectoral indices in the green moving up by 4.9 per cent.

Yes Bank said in a note that the higher current account deficit will not be fully covered by capital flows in FY23. India has already witnessed FII outflows of $30.5 billion since October 2021 and $9.4 billion since April 2022, from both debt and equity.

“Even as we expect FDI flows to stay on a strong footing (though weaker than the previous fiscal) and short-term trade finance to remain buoyant, overall flows under the capital account is expected at around $55 billion in FY23, compared to $94 billion in FY 22,” the note said.

The risks of a lower BoP balance cannot be ruled out in the event of larger outflows than being currently anticipated.

As per the IIF, capital flows to EM, including India, are expected to slow to $972 billion this year from $1.68 trillion in 2021, a decline of 42 per cent YoY.

Excluding China, the net capital flows are likely to drop to $645 billion, down from $1 trillion last year. The underlying weak fundamentals of the EM economies on account of higher oil prices, high Current Account Deficit (CAD), elevated general government debt to GDP ratio and limited fiscal space to support growth is likely to limit the possibility of much capital pull into the region, Yes Bank said.

In FY 2021-22 alone, FIIs sold their investments for approximately worth Rs 1.22 lakh crore as against FY 2020-21 where they invested around Rs 2.67 lakh crore. There are multiple reasons because of which FIIs started pulling out their investments from the Indian markets since the last financial year, Angel One said in a note.

The Russia-Ukraine war took centre stage in the last week of February. Uncertainties and geopolitical complexities that arose due to this war have created a fear among foreign investors. This has resulted in the FIIs outflows in India.

India is the third largest consumer of crude oil and is also the third largest importer of crude oil across the globe. The heat of the Russia-Ukraine war had a massive impact on the global economy as the crude oil prices spiked. These soaring crude prices turned the Indian stock market volatile and resulted in the increase in the costs of transportation and an increase in inflation. This impact on the economy and imports influenced foreign investors’ sentiments which pushed them to pull their money out of the Indian stock market, Angel One said in a note.

Indian markets are aligned with the US and the other global markets which means if the other markets start falling, Indian markets will also be impacted. Among the major reasons that are recently affecting the US economy are higher inflation, an expected rise in the interest rate to control inflation and rising inflation has led to a sharp jump in the US bond yields.

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Business

Indian Railways Introduces Discounted ‘Round Trip Package’ To Ease Festive Season Travel

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3 days ago

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August 9, 2025

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New Delhi: To avoid rush by ensuring hassle-free ticket booking experience during the upcoming peak festive seasons, the Ministry of Railways on Saturday said that it has decided to formulate a ‘Round Trip Package’ on discounted fare and rebates benefit.

The move will facilitate passengers and redistribute the peak traffic for a larger range during peak festival seasons and ensure both sides utilisation of trains, including special trains.

“It has been decided to formulate an experimental scheme named as Round Trip Package for festival rush on discounted fare,” the Railways Ministry stated.

According to the ministry, the scheme will be applicable for those passengers who choose their return journey during the prescribed period.

Under this scheme, rebates shall be applicable when booked for both the onward and return journey for the same set of passengers.

Passenger details of the return journey will be the same as those of the onward journey. Passengers can book their tickets from August 14 for the advance reservation period (ARP) date of October 13.

“An onward ticket shall be booked first for the train start date between 13th October 2025 and 26th October 2025, and subsequently return journey ticket shall be booked by using the connecting journey feature for the train start date between 17th November and 1st December 2025,” the Ministry stated.

However, advance reservation period will not be applicable for booking of return journey.

Other conditions to avail the benefits of the railway’s new special scheme are the booking shall be permissible only for confirmed tickets in both directions, total rebates of 20 per cent shall be granted on base fare of return journey only, booking under this scheme shall be for the same class and same O-D pair for both onward and return journey.

According to Railways, no refund of fare shall be permissible for the tickets booked under this scheme.

This scheme shall be allowed for all classes and in all trains, including special trains (Trains on demand), except trains having Flexi fare.

In addition, no modification will be allowed on these tickets in either of the journeys, and there will be no discounts, Rail travel coupons, Voucher-based bookings, or Passes be admissible during return journey booking on concessional fare.

Passenger can book their ticket via both online and offline modes; however, both onward and return journey tickets must be booked using the same mode (online or offline).

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Business

Sensex crosses 81,000 Mark, Nifty Jumps 157 Points On Strong Metal & Auto Stocks

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1 week ago

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August 4, 2025

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Mumbai: The Indian stock market ended Monday on a strong note, with the BSE Sensex rising 418.81 points (0.52%) to close at 81,018.72, crossing the key 81,000 mark. During the day, it touched a high of 81,093.19. The NSE Nifty also surged by 157.40 points (0.64%) to end at 24,722.75, after hitting an intraday high of 24,734.65.

Top gainers and losers

Among major gainers on the Sensex were Tata Steel, BEL, Adani Ports, TCS, Tech Mahindra, Bharti Airtel, HCL Tech, Trent, M&M, Reliance Industries, UltraTech Cement and L&T.

On the flip side, Power Grid, HDFC Bank, ICICI Bank, and Hindustan Unilever ended the session with losses.

Why the market rallied

The market’s rally was mainly driven by strong performances in the metal and auto sectors. According to experts, a weakening US dollar, strong auto sales, and positive Q1 results from key companies helped boost investor confidence.

Vinod Nair, Head of Research at Geojit Financial Services, said,

“Consumption-driven companies are showing recovery in volume demand. Also, weak US job data may lead to interest rate cuts by the Federal Reserve.”

Global cues positive

Asian markets mostly ended in the green with Hong Kong, South Korea, and China posting gains. However, Japan’s Nikkei closed in red.

European markets were trading positively, while US markets had ended lower on Friday.

Oil prices also slipped, with Brent crude falling 1.15% to USD 68.87 per barrel.

Meanwhile, Foreign Institutional Investors (FIIs) sold shares worth Rs 3,366.40 crore on Friday, as per exchange data.

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India Lost ₹22,842 Crore To Cybercriminals & Fraudsters In 2024: DataLEADS

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1 week ago

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August 2, 2025

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India lost Rs 22,842 crore to cybercriminals and fraudsters in 2024, DataLEADS, a Delhi-based media and tech company, said in its report on widespread digital financial frauds in the country. The amount stolen by digital criminals and fraudsters last year was nearly three times more than the Rs 7,465 crore in 2023 and almost 10 times more than the Rs 2,306 in 2022, DataLEADS said in ‘Contours of Cybercrime: Persistent and Emerging Risk of Online Financial Frauds and Deepfakes in India.

Prediction For Cyber-Crime Frauds

The Indian Cybercrime Coordination Centre, I4C, a federal agency that liaises between state and central law enforcement, predicts Indians will lose over Rs 1.2 lakh crore this year. The number of cybercrime complaints has spiked similarly; nearly twenty lakh were reported in 2024, up from around 15.6 lakh the year before and ten times more than were logged in 2019.

The surge in the number of cybercrime complaints and the volume of money lost points to one inescapable conclusion – India’s digital crooks are getting smarter and more efficient, and, in a country with a staggering nearly 290 lakh unemployed people, their ranks are increasing.

Bank-related frauds have increased dramatically; the Reserve Bank of India reported a nearly eightfold jump in the first half of FY 2025/26 compared to the same period last year. And the amount of money lost was staggering – Rs 2,623 crore to Rs 21,367 crore. Private sector banks accounted for nearly 60 per cent of all such incidents. But it was customers in public sector banks who were worst-hit; they lost Rs 25,667 crore in all.

Why have these numbers jumped so much over the past three years?

Because of the increased use of digital payment modes – i.e., smartphone-enabled services like Paytm and PhonePe – and the sharing and processing of financial details online – via (what many believe are encrypted and fail-safe) messaging platforms like WhatsApp and Telegram.

Federal data says there were over 190 lakh UPI, or unified payment interface, transactions in June 2025 alone, and these were worth a combined Rs 24.03 lakh crore. Digital payments’ value has grown from roughly Rs 162 crore in 2013 to Rs 18,120.82 crore in January 2025, and India accounts for nearly half of all such payments worldwide.

COVID-19

Much of this increase can be attributed to the pandemic and the subsequent lockdowns.

During COVID-19, the government pushed for a switch to UPI apps like Paytm to ensure social distancing and minimise contact with currency notes, via which the virus could be transmitted.

Digital Payment Tools In Rural Areas

The government also reasoned that digital payment tools would ensure greater penetration of financial services, particularly in rural areas. By 2019, India already had 440 million smartphone users and data rates were among the cheapest in the world – 1 GB cost Rs 200, or less than $3.

Insurance sector scams were also common. These included life, health, vehicle, and general, and are becoming an increasingly lucrative option for cybercriminals, particularly as insurance companies urge customers to opt for app-based services.

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