FPIs may relook at Indian stocks after election verdict, 2nd wave RISE IN CONSUMER COMPLAINTS AGAINST E-COMMERCE FIRMS

Foreign portfolio investors’ (FPIs) reaction to the assembly election results and the government’s handling of the second Covid wave hold the key to market movementsthis month.

April saw a highly volatile market in April, with FPIs becoming net sellers by around Rs 10,000 crore and ending the month with a big sell-off on Friday by Rs 3,465.07 crore.

The assembly elections verdict not going in favour of the BJP-led central government may make FPIs take a relook at their recent investments in India, as they would like political stability rather than uncertainty in any form.

Mamata Banerjee and M. K. Stalin's win could unite opposition parties against the central government, which has fared badly in controlling the pandemic second wave and FPIs could make a quick exit to salvage their profits.

FPIs turned net sellers as the assembly elections verdict was getting nearer and may sell more equity holdings in May, given the fact that the rupee has weakened against the US dollar and trades in the Rs 74-75 range now. Covid's second wave has slowed economic activity and the focus of all is on saving lives and controlling the pandemic, which could dent corporate profit in the AprilJune quarter, making FPIs book profit now rather than wait till the first quarter earnings are out.

However, the good news is that mutual funds bought equity assets worth close to Rs 6,000 crore in April, continuing the trend started in March. As per Sebi data, mutual funds were net buyers of equities worth Rs 5,926.26 crore in April.