Foreign portfolio investors (FPIs) continued to exhibit bearish sentiments towards Indian equity markets and pulled out almost Rs 20,000 crore in the last five trading sessions. This withdrawal was attributed to increased valuations of domestic stocks and moving their allocation to China.
Official data showed that FPIs turned net sellers in 2024 so far and their outflows touched Rs 13,401 crore, reported PTI. In November itself, the FPIs dumped Indian equities worth Rs 19,994 crore, including five trading sessions from 4-8 in the month.
Meanwhile, the investors poured in Rs 599 crore in the debt general limit and Rs 2,896 crore in the debt voluntary retention route (VRR). Overall in 2024, the FPIs infused Rs 1.06 lakh crore in the debt market.
Commenting on the FPI flows, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “Going ahead, the FPI selling trend is likely to continue in the near term till data indicate the possibility of a trend reversal. If the Q3 results and leading indicators reflect a recovery in earnings, the scenario can change with FPIs reducing selling and even turning buyers. Investors will have to wait and watch for the data.”
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Prior to the outflow, the investors withdrew Rs 94,017 crore in October. However, in September, the inflow hit a nine-month peak of Rs 57,724 crore.
Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, stated, “While the immediate uncertainty over the US Presidential election and interest rates in the US has been addressed, several drivers of the foreign flows into the Indian equity markets continue to remain unfavourable. One of the primary reasons for FPIs exiting Indian equities is their newfound affinity towards China, given its attractive valuation and potential for generating higher growth. China has recently introduced a series of stimulus measures to revitalise its slowing economy and attract foreign investments.”
