How long will the FII sell flow continue?


One of the most common question and worry is the continued sell flow by FIIs. How long it can continue? If we look at historical patterns, foreign portfolio flows typically turn negative towards EMs including India when Fed starts talking about tightening or raising rates.


In 2015, in anticipation of fed raising rates, FIIs withdrew INR 37,000cr in 2H of CY 2015 from the Indian equity markets vs a buying of INR 87,000cr in CY 2013 and INR 67,000cr in CY 2014.


We think with the interest rates peaking out and the pressure easing off through rest of 2022, it should ebb and 2023 should be a positive year. This was reflected again in 2019 when fed backed off from tapering and flows turned positive – buying INR 40,000cr in CY 2019.

Via Carnelian Capital Newsletter