Since Oct-2021, FIIs sold 92,161 Crores INR in India Stock Markets and this is the reason for Nifty-50 to tumble from 18,000 level to 17,000 in past one month.
Short term investors should be more cautious.
Even increase of Omicron cases to 100 could be another reason for Nifty-50 to tumble by 263 points and currently trading at 16,985.
Key reasons why FIIs are selling is not sure but if interest rates in USA increases, part of FIIs will invest in fixed deposits in USA.
Currently FED had not increased interest rates in USA but again they suggested 3 hikes will be possible in USA due to inflation rose to 6.8% in Nov-2021 when compared year on year.
Even though Foreign Institutional Investors sold over 92,000 Crores INR in India Stock Markets Cash segment, the Domestic Institutional Investors (DII) invested over 55,000 Crores in India Stock Markets since Oct-2021.
WHO and Biden Government cautioning the Omicron cases can spread at a faster rate Globally.
Even though symptoms of Omicron are not serious, there can be some international travel bans and again some restrictions over crowd places can come in near by future.
But again lockdown will not come. No country can digest lockdowns. Already offline school decisions had been taken in New Delhi.
Mainly short term investors should be more cautious if FIIs are selling more. Reason is couple of investors in mutual funds will sold their mutual funds if markets if falling. Then DIIs are forced to sell couple of shares to give money to mutual fund holders. This is a chain.
So short term investors should be more cautious.
High P/E multiple stocks will have more risk.
Again negative profit companies will have more risk even though in future there is probability to earn profits.
Shuffling of stocks in portfolio will happen when market tumbles. Then high PE multiple stocks and negative profit making companies will have more risk.