“It’s good that FIIs are selling. Now you get something that costs Rs 10 to Rs 7-8. Otherwise it would be very expensive,” the 66-year-old fund manager said in an interaction with ET NOW.
As aggressive rate hikes by the US Federal Reserve and other European central banks have sparked recession fears, supporting the US dollar, global investors are selling emerging market stocks and putting money into the dollar American haven.
So far in the current calendar year, FIIs have sold Indian stocks worth Rs 1.76 lakh crore, according to data available with NSDL, with the institutional class becoming net sellers eight months on 10. That said, most of the selling was absorbed by strong domestic inflows, cushioning the drop in Indian equities.
The BSE Sensex is up 0.03% for the year versus a decline of over 22% seen in the S&P 500, 7% in Nikkei and 7% in the FTSE 100.
“Retail investors buy secularly, but global investors are cyclical and opportunistic and rightly so because they can buy something like a cement company at half the price in China or anywhere else,” Agrawal said. But he doesn’t expect the trend to continue for long.
We are at 3.5% of global market capitalization and heading towards 5% where global equity manager allocation is a percentage or less than that, he noted.
“How long will you keep selling India? When India is doing well in the global recovery, then they will want to come and buy quickly. They sold it unemotionally, they will buy it unemotionally. emotion. But my retailer is buying continuously. So when they both want to buy, you will have a Diwali,” Agrawal added.
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