FPIs Continue To Dump Indian Equities, Outflow Reaches Rs 22,420 Crore In Nov So Far

In November so far, the investors pulled out from the segment due to high domestic stock valuations, surging allocations to China, and the hike in US dollar as well as treasury yields

At the same time, the investors poured in Rs 42 crore in the debt general limit and Rs 362 crore in the debt voluntary retention route (VRR).

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Foreign portfolio investors (FPIs) withdrew Rs 22,420 crore from the Indian equities in the month so far, official data from the depositories revealed. At the same time, the investors poured in Rs 42 crore in the debt general limit and Rs 362 crore in the debt voluntary retention route (VRR).

In the year so far, the FPIs infused Rs 1.06 lakh crore in the debt market, reported PTI. However, the investors continued to remain bearish towards the Indian equity market in the recent months. In November so far, the investors pulled out from the segment due to high domestic stock valuations, surging allocations to China, and the hike in US dollar as well as treasury yields. In 2024 so far, the overall outflow from FPIs towards equities touched Rs 15,287 crore.

Akhil Puri, Partner, Financial Advisory, Forvis Mazars in India noted, “Investors (FPIs) have recorded a total outflow of Rs 15,827 crore in 2024 so far. As liquidity tightens, FPI inflows are expected to remain subdued in the short term. A positive shift in FPI activity is unlikely before early January, keeping overall market sentiment weak.”

In October, the investors withdrew Rs 94,017 crore, marking the worst monthly outflow. Meanwhile, the outflows hit Rs 61,973 crore in March 2020. 

Explaining the fund flows, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The relentless FPI selling since October has been triggered by the cumulative impact of three factors: one, the high valuations in India; two, concerns regarding the earnings downgrade; and three, the Trump trade.”

Foreign investors are moving their focus to the Chinese stock market from domestic dueto the new stimulus package introduced in the neighbouring economy. Further, the elevated market valuation in India, tepid corporate results, and high inflation have caused concerns regarding the economic slowdown, Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, stated.