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FPIs sell Nifty Bank futures as private banks report margin pressure
On Monday, foreign investors net sold Nifty Bank futures worth ₹1,201 crore, after net buying ₹1,441 crore on Friday.
Foreign portfolio investors reduced exposure to the Nifty Bank complex after major private banks reported compression in net interest margins in the June quarter, according to LiveMint Markets. The selling followed results from HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and Axis Bank.
LiveMint Markets reported that FPIs net sold Nifty Bank futures worth ₹1,201 crore on Monday, after net buying ₹1,441 crore on Friday. The futures selling coincided with a provisional cash-market sale of ₹1,121 crore by the relevant cohorts.
The Bank Nifty fell 1% to 57,945. HDFC Bank, Axis Bank, and Kotak Mahindra Bank each dropped between 2% and 5.5%, while ICICI Bank gained 1.1%.
The margin move varied by lender, with HDFC Bank reporting a NIM of 3.26% in the first quarter of the current fiscal, down from 3.4% in the prior quarter. ICICI Bank’s NIM increased 4 basis points to 4.36%, and LiveMint Markets said analysts linked the caution to falling low-cost deposit levels that can raise funding costs and pressure NIMs.