Do not think outlook determines FII flows: Dipen Sheth

In a chat with ET Now, Dipen Sheth, Head-Institutional Research, HDFC Securities, shares his views on

ET Now: Fill us in on the importance of this news for the markets, was it waiting for a reason or does this provide the reason for the markets to maybe go up if it does in the first place?

Dipen Sheth: I do not think minute by minute. Day by day fluctuations can be attributed just to single event. That is a good news if S&P thinks that the outlook is a little better for India than what it used to be but then we have been seeing good news playing out right since the events of May.

Frankly, I would not look at S&P to tell me that the outlook for the Indian economy is a little better than where it was six months or a year ago. I would not expect this sort of view on the outlook to be affecting near term market sentiment in any case. I do not think that is what determines FII flows.

FII flows have been steady, strong and determined ever since the events of May played out and ever since the new government took charge. There has been a little bit of a sell-off of late and that is driven again by largely external factors and a little bit of I would say culmination of the story insofar as the Modi reset is concerned. So markets never move in a straight line and a little bit of a sell-off was due and that is what has happened. I am not really in too much into this.