Mumbai: Foreign portfolio investors (FPIs) remained sellers of Indian equities in the first fortnight of this month. As per market experts, the uptrend in the US market and US bond yields, which was fueled by Republican Donald Trump’s victory in the US presidential elections and the latest US Federal Reserve’s interest rate cut verdict influenced investors.
FPI sell-off hit a record high in October amid ongoing geopolitical tensions in the Middle East and cheaper valuations in the Chinese stock market. FPI outflows recorded in October were the highest ever in a single month in Indian markets.
According to the National Securities Depository Ltd (NSDL) data, FPIs offloaded Rs 22,420 crore worth of Indian equities, and the net outflow stood at Rs 26,343 crore as of November 15, taking into account debt, hybrid, debt-VRR, and equities. The total debt investment was Rs 362 crore.
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October’s FPI outflow hit a 10-month high, the highest sell-off from the Indian market YTD. As per data, the FPIs pull out Rs 1.14 lakh crore from Indian equities in last month. The previous record for the largest monthly outflow occurred during the Covid-19 pandemic in March 2020, when FPIs sold Rs 65,816 crore worth of Indian stocks.
The NSE Nifty and BSE Sensex experienced significant declines of 6.22% and 5.83%, respectively, last month, marking their worst monthly performance since March 2020. This is the worst monthly performance for Indian front-line indices in over four years.
The latest outflow follows a significant nine-month high investment of Rs 57,724 crore in September 2024. Notably, in all 22 trading sessions in October, FPIs remained net sellers, with the largest outflow recorded on October 3, when they withdrew Rs 15,506 crore. The last time FPIs where net buyers were on September 26, when they purchased Rs 630 crore worth of shares.
Meanwhile, the domestic institutional investors (DIIs) purchased Rs 1.07 lakh crore worth of Indian stocks in October.
Foreign institutional investors (FII) or Foreign portfolio investors (FPI) are those who invest in the financial assets of a country while not being part of it. On the other hand, Domestic Institutional Investors (DII) are those who invest in the country they are living in. Both types of investors can impact the economy’s net investment flows.
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