FPIs Reverse Sentiment, Infuse Rs 24,454 Crore In Equities In December So Far

This comeback from the investors was attributed to the stabilising global conditions and anticipations of a possible rate cut from the Federal Reserve

Investors pulled out Rs 21,612 crore from equities in November and a massive Rs 94,017 crore in October, which was the worst monthly outflow seen ever.

Source : Pexels

Foreign portfolio investors (FPIs) reversed the sentiment in the market and started to infuse funds in the equities market in December. The investors pumped in Rs 24,454 crore in the the month, as of December 6, official depositories data revealed.

This infusion came after the investors dumped equities in the last two months, reported PTI. This comeback from the investors was attributed to the stabilising global conditions and anticipations of a possible rate cut from the Federal Reserve.

Notably, investors pulled out Rs 21,612 crore from equities in November and a massive Rs 94,017 crore in October, which was the worst monthly outflow seen ever.

Elaborating on the fund flows, Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, noted, “The flow of foreign investments into Indian equity markets will hinge on several key factors. These include the policies implemented under Donald Trump's presidency, the prevailing inflation and interest rate environment, and the evolving geopolitical landscape.”

Meanwhile, during the period under review, the investors took out Rs 142 crore in the debt general limit and poured in Rs 355 crore in the debt voluntary retention route (VRR). In 2024 so far, the investors invested Rs 1.07 lakh crore in the debt market.

Srivastava further said that the financial performance of Indian firms in the third quarter warnings and how the Indian economy fares will influence the sentiment in the market.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, noted, “The shift in FPI strategy is evident in stock price movements, especially in large-cap banking stocks, where FPIs have been selling. This segment still has upside potential as it remains fairly valued and continues to grow at a steady pace, with more domestic institutional and retail investments expected to flow in. Additionally, the IT sector is poised to perform well and attract increased FII interest.”