FPIs Continue Dumping Indian Equities In Nov, Outflows Hit Rs 26,533 Crore

Meanwhile, the FPIs withdrew Rs 1,110 crore from the debt general limit and poured in Rs 872 crore in the debt Voluntary Retention Route (VRR) in the period under review

Foreign portfolio investors dumped Indian equities worth Rs 26,533 crore in the current month so far. The investors withdrew the funds from the segment due to a rise in allocations to China, concerns regarding muted corporate earnings, and higher valuation of domestic stocks.

Official data from the depositories revealed that the investors pulled out Rs 26,533 crore as of November 22, reported PTI. Meanwhile, the FPIs withdrew Rs 1,110 crore from the debt general limit and poured in Rs 872 crore in the debt Voluntary Retention Route (VRR) in the period under review.

While the investors continued to sell equities, the magnitude of outflows reduced majorly in comparison to October when FPIs withdrew Rs 94,017 crore on a net basis. In 2024 so far, the overall pull out stood at Rs 19,940 crore, while investment in the debt market in the year so far touched Rs 1.05 lakh crore.

Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Research India, noted, “Going ahead, the flows from foreign investors into the Indian equity markets would depend on the policies implemented under Donald Trump's presidency, the prevailing inflation and interest rate dynamics, the trajectory of the geopolitical landscape, and the third-quarter earnings performance of Indian companies.”

In September, the investment from FPIs hit a fresh peak of Rs 57,724 crore. Srivastava stated that worries regarding the elevated valuations of Indian equities continue and this has pushed investors to shift their focus towards markets providing more lucrative valuations.

“Additionally, China continues to draw significant foreign inflows at India's expense, bolstered by its compelling valuation levels and the recent announcement of stimulus measures aimed at revitalizing its slowing economy. Furthermore, India's sub-par corporate earnings and elevated inflation figures have raised concerns about potential delays in domestic interest rate cuts,” the expert added.

Amongst sectors, FPIs continued buying in IT stocks, while banking stocks remained resilient despite facing selling pressure, owing to support from domestic institutional investors.