The sharp exodus of overseas traders funds from Indian fairness market has been compensated by home traders, mentioned Motilal Oswal Monetary Providers (MOFSL).
As per MOFSL report, FIIs continued to stay sellers in India as the worldwide risk-off sentiment and the geopolitical scenario have added to considerations of inflation, larger bond yields, and world fee hikes.
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“This has resulted in $14.1 billion of outflows from the Indian market since Oct`21. This has been offset by DII buying of $16 billion over the same period.”
In addition to, the report cited that present index correction masks the sell-off within the broader market.
Accordingly, whereas the Nifty is down 10 per cent from its October 2021 peak, the broader market has seen a a lot sharper sell-off.
“Of the NSE 500 constituents, 37 per cent of the stocks are trading more than 30 per cent lower from their respective 52-week highs.”
“Of the Nifty constituents, close to 50 per cent stocks are now trading at valuations that are at a discount to their respective 10-year average.”
Moreover, one-third of Nifty constituents are buying and selling at a premium of greater than 10 per cent versus its 10-year common, demonstrating the two-faced nature of the index on valuations.
As well as, it identified that company earnings stay resilient, regardless of the challenges.
“The healthy earnings visibility can act as cushion in an otherwise fragile external situation. If the Russia-Ukraine conflict elongates and leads to elevated energy prices for longer, it may impact earnings estimates.”
“However, close to two-third of Nifty earnings are insulated or benefits from elevated energy prices, while one-third is adversely impacted.”