Dalal Street pays for its performance

Foreign portfolio investors have dumped shares worth Rs 1,400 crore in the first two days of 2019, resulting in the stock market starting the New Year on a sombre note.

The Sensex and the Nifty have declined 2 per cent in the last two days. The speculation is that the foreign fund outflows have been driven by selling from some global exchange traded funds (ETFs) to trim their overweight on India.

The Indian equity market was the second best-performing among emerging economies for 2018 after Brazil. Most of the ETFs track benchmarks likes MSCI or S&P indices.


If one country outperforms and ETFs weight goes above the country-specific weights of MSCI or S&P, ETFs are forced to sell stocks proportionately, said market participants.