“They may need some money,” said Tandon. Some of the market fall is already being attributed to such selling, according to him.
FPIs have been net sellers to the tune of Rs 61,973 crore in the equity markets.
Consequently, the Sensex has plunged from its January high of 42,273.87 to 28,265.31. They sold a further Rs 60,376 crore in the debt market.
Norway’s Government Pension Fund Global had also been raising its India bets. Its India assets had grown 27.2 per cent to $9.4 billion, according to annual disclosures. Examples of other oil-producing nations with SWFs are Qatar, Oman, Kuwait, and Iran.
Vinay Paharia, chief investment officer (CIO) of Union Asset Management Company, said the low interest rates put in place by countries could help valuations revive.
Earnings could see a recovery in a relatively short time. Consequently, the current bout of liquidation by large institutions is unlikely to weigh on markets
for long, said Paharia.
Threats to global growth have prompted governments to act quickly and decisively, according to a Morgan Stanley research report A Full-Court Policy Press, authored by chief economist and global head of economics Chetan Ahya.
“Since mid-January, 23 of the 30 central banks we cover have eased their monetary policy. The global weighted-average policy rate has declined to below the post-GFC (global financial crisis) lows. All the G4 central banks have announced aggressive quantitative easing measures. We estimate these central banks to make asset purchases of $6.5 trillion in this easing cycle, with cumulative asset purchases of $4-5 trillion by the US Fed alone,” it said.