NEW DELHI: Foreign portfolio investors (FPIs) exodus from the Indian equity market slowed down to RS 2,426 crore during the second week of November, according to the data of National Securities Depository Limited (NSDL) data. FPIs have withdrawn Rs 22,420 crore in November thus far, with Rs 19,994 crore sold in the first week.
This persistent outflow pattern indicates a prevailing cautious approach amongst international investors during uncertain market conditions.
The continuous selling has resulted in negative net FPI investment in equities for 2024. Currently, FPIs show net selling of Rs 15,827 crore in the equity segment, negating the positive inflows observed earlier.
These outflows coincide with a complex global economic landscape characterised by geopolitical conflicts, rising inflation, and monetary policy decisions, leading to increased investor caution.
Investment specialists suggest that international investors are shifting their holdings towards low-risk assets or alternative emerging markets, affecting Indian market movements.
Ajay Bagga, Banking and Market expert told ANI, “The selling intensity by FPIs seems to be reducing as per the data from the last week. A big flip is that post the Trump victory, there is a rerating of China downwards and India has emerged as a potential beneficiary of a China+1 move. The major global flows are going to US and Japan equity markets. EMs are seeing outflows.”
He further added “however in anticipation of Trump admin economic policies and the Trump preference for a weaker US dollar we can expect a reversal in EM flows. FPI selling intensity weakening is the initial impact of this re rating”.
Industry observers continue to track FPI flow patterns, recognising their significant influence on domestic market behaviour.