FIIs’ Selling Spree and Its Influence on Indian Markets

In last couple of weeks, we are seeing sudden divergence in the performance between world equity markets and the Indian equity market. While just a few months ago, we were experiencing bullish trends with seemingly endless upward momentum, nevertheless in the recent weeks have seen a sharp downturn, reminiscent of an impending crash. Interestingly, this downturn is occurring despite most developed and emerging markets hitting new all-time highs, and global cues not indicating any significant cause for concern. Last week saw some support to the market from unexpected corner after Amit Shah on Monday expressed optimism about the future of the Indian stock market post the results of the Lok Sabha Elections. However, it is too early if we have reversed the situation.