FPIs Continue To Dump Indian Equities, Withdraw Rs 22,194 Crore In Jan So Far. Find Out Why

The experts noted that Indian equities have become unattractive for foreign investors due to the record low level of the rupee and the jump in the US bond yields.

The net inflows in 2024 touched Rs 427 crore, against a massive infusion of Rs 1.71 lakh crore recorded in 2023.

Source : ABPLIVE AI

Foreign portfolio investors (FPIs) continued to have a bearish outlook towards Indian equities in the month. The investors withdrew Rs 22,194 crore from Indian equities in January so far, driven by expectations of a muted earnings season, a steady increase in the US dollar, and concerns regarding a tariff war during Donald Trump’s presidency. 

Official data with the depositories revealed that the investors infused Rs 15,446 crore during the preceding month of December 2024. The data for this month was recorded for trading sessions till January 10, 2025, reported PTI.

Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, noted, “Foreign investors have scaled back their investments in Indian equities significantly amid global and domestic headwinds. This exodus of foreign money from the Indian markets could be attributed to multitude of factors, such as expectation of yet another weak earning season, concerns over the tariff war under Trump's presidency, slowdown in GDP growth, still high inflation numbers and uncertainty over the commencement of the interest cut in India.”

The experts noted that Indian equities have become unattractive for foreign investors due to the record low level of the Indian rupee, the increase in the US bond yields, along with the higher valuation of Indian markets.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, noted, “FPIs have been sellers on all trading days except January 2. The single major reason for the relentless selling by the FPIs is the steady rise in the dollar index which is above 109 now. The surge in the 10-year bond yield to above 4.6 per cent is ensuring capital flows from emerging markets like India.”

Notably, the investors have continued to exhibit a cautious approach towards domestic equities. The net inflows in 2024 touched Rs 427 crore, against a massive infusion of Rs 1.71 lakh crore recorded in 2023.