Why SELL OFF happen in indian stock market ?
One reason behind fall in indian stock market is looming global recession
FPIs have sold $9.5 billion (Rs 71,000 crore) worth equities in last 22 days. They accounted for one fifth of the total market capitalisation of Indian equities, nearly $341 billion (Rs 25.52 lakh crore) as of March 15, 2020, compared with $431 billion (Rs 33 lakh crore) at the beginning of 2020.
Earlier in October 2019, the finance ministry had published a circular raising the statutory foreign portfolio investor (FPI) limit of Indian companies to the sectoral foreign investment limit, effective 1 April, 2020, with the approval of the company’s board of directors and its general body, before 31 March 2020.
But failed to implement the change which leads to sell off
Government should moved carefully here, considering the damage that has been done to the market because of the incessant FPI selloff. The government may have lost an opportunity to reverse the tide
There were expectations that there would be a lot of inflows because of the change in MSCI norms
One reason behind fall in indian stock market is looming global recession
FPIs have sold $9.5 billion (Rs 71,000 crore) worth equities in last 22 days. They accounted for one fifth of the total market capitalisation of Indian equities, nearly $341 billion (Rs 25.52 lakh crore) as of March 15, 2020, compared with $431 billion (Rs 33 lakh crore) at the beginning of 2020.
Earlier in October 2019, the finance ministry had published a circular raising the statutory foreign portfolio investor (FPI) limit of Indian companies to the sectoral foreign investment limit, effective 1 April, 2020, with the approval of the company’s board of directors and its general body, before 31 March 2020.
But failed to implement the change which leads to sell off
Government should moved carefully here, considering the damage that has been done to the market because of the incessant FPI selloff. The government may have lost an opportunity to reverse the tide
There were expectations that there would be a lot of inflows because of the change in MSCI norms
If the nation increase the foreign portfolio investment limit in a company from the current 24% to a higher threshold set for its sector. The move could eventually trigger net inflows of between $2 billion and $2.5 billion to Indian equities from passive funds, according to estimates from Target Investing and Morgan Stanley.
MSCI, a provider of research-based indexes and analytics, has said it will wait for the implementation of these changes and the systematic publication of the new sectoral limits before making any changes to the MSCI Indexes.
Full source --> Click here
Full source --> Click here