New Delhi: The Indian stock market has taken a massive hit in the last few sessions due to continuous selling by the foreign investors. The FIIs have pulled out Rs 85,790 crore (around USD 10.2 billion) from equities in the October month due to Chinese stimulus measures, attractive stock valuations, and the elevated pricing of domestic equity shares. FPIs pulled out Rs 85,790 crore from Indian equities between October 1 and 25, 2024.
October 2024 has turned out to be the worst-ever month in terms of foreign fund outflows since the Covid-induced lockdown period in March 2020, when FPIs withdrew Rs 61,973 crore from equities. The latest selling by foreign investors came after a nine-month high investment of Rs 57,724 crore in September 2024. The FPI selling impacted NSE’s benchmark index Nifty down by 8 per cent from the peak.
FII selling data in 2024
Since June 2024, foreign portfolio investors (FPIs) have continuously pumped in money into the Indian stock market to purchase equities after withdrawing Rs 34,252 crore in April-May. Data showed that FPIs have been major investors in 2024, except for January, April, and May.
The nature of the foreign investment into the domestic market is heavily dependent upon how global events like geopolitical developments shape up, interest rate movements, Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, opined.
FPIs will keep a close eye on the inflation trends, quarterly earnings of companies, and the impact of festive season demand to take their next move in the Indian market, Srivastava added.
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, opined that the trend of FPI selling expected to continue. He added that selling was a result of the Chinese government announcing the stimulus and the cheap valuations of Chinese stocks. Also, the overvalued valuations of domestic equities led to Indian stock market becoming the top choice of FPIs to sell.
As per Akhil Puri, Partner, Financial Advisory, Forvis Mazars in India,October month recorded massive outflows in FPI due to geopolitical tensions and shifting global economic conditions influenced investor sentiment.
“With US elections looming, a sharp recent rise in US bond yields implying diminished expectations for aggressive rate cuts by the US Fed, lower growth and high inflation expected back home, continued geopolitical issues between Israel-Iran and Russia-Ukraine has led to FPIs pulling out funds from most EMs, including India,” Piyush Mehta, smallcase Manager and CIO at Caprize Investment, said.
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