Foreign investors pulled out Rs 21,612 crore ($2.56 billion) from Indian equity markets in November, primarily due to rising US bond yields, a stronger dollar and anticipated domestic economic slowdown.
The outflow, whilst significant, was considerably lower than October’s substantial withdrawal of Rs 94,017 crore ( $ 11.2 billion).
With the latest withdrawal, Foreign Portfolio Investors (FPIs) have recorded a total net outflow of Rs 15,019 crore in 2024 to date.
Data indicates a net outflow of Rs 21,612 crore in November, following October’s record withdrawal of Rs 94,017 crore. This contrasts with September’s nine-month high investment of Rs 57,724 crore.
Future foreign investments in Indian equity markets will depend on various factors, according to Himanshu Srivastava, associate director manager research, Morningstar Investment Research India told news agency PTI.
These include Donald Trump‘s presidential policies, current inflation and interest rates, and the global geopolitical situation.
Financial experts attribute the recent outflow to increased US bond yields, dollar appreciation and anticipated domestic economic deceleration.
Despite November’s overall net outflow, FPIs demonstrated a significant shift in the week ending November 29, following the BJP-led Mahayuti alliance’s decisive victory in the Maharashtra Assembly elections.
The inclusion of select Indian stocks in MSCI’s key indices and potential ceasefire prospects between Israel and Lebanon also contributed positively to market sentiment.
V K Vijayakumar, chief investment strategist at Geojit Financial Services, highlighted the erratic nature of recent FPI activity, noting that whilst FPIs were buyers during November 23-25, they subsequently sold equity worth Rs 16,139 crore over the next two days.
Conversely, FPIs invested Rs 1,217 crore in debt general limit and Rs 3,034 crore in debt Voluntary Retention Route (VRR) during this period. Their total debt market investment for the year stands at Rs 1.07 lakh crore.