Mega sell-off of FPI, foreign investors ran away with ₹74,822 crore in 8 months, threat to the stock market!
FPI In Share Market: Foreign portfolio investors (FPIs) have seen a net withdrawal of Rs 74,822 crore from the Indian capital market till December 26 this year. Net withdrawal means that they have taken out Rs 74,822 crore more than what they have invested in the market. So far, Rs 29,571 crore has been withdrawn in December alone, which is the highest since January. Out of 12 months of the year, FPIs have been sellers in eight months while in the remaining four months they have been net buyers.
According to CDSL data, FPIs sold equities worth a net Rs 1,52,227 crore during the year. At the same time, he bought heavily in debt. He made a net purchase of debt worth Rs 72,893.
Investment of Rs 10,877 crore in mutual funds
According to the report, foreign investors invested a net amount of Rs 10,877 crore in mutual funds. He also made a net investment of Rs 1,442 crore in hybrid equipment. FPIs made net sales of equities worth Rs 14,734 crore in December. Their investments in debt, hybrid instruments and mutual funds also remained negative during the month.
Stock market situation last week
This week, investor sentiment in the stock market will be influenced by macroeconomic data, global trends and trading activities of foreign investors. Analysts said that vehicle sales figures will also be closely monitored. Due to only a few trading sessions remaining this year, Indian stock markets are expected to remain in a limited range, although the trend may remain positive. Last week, BSE Sensex rose 112.09 points or 0.13 per cent, while Nifty rose 75.9 points or 0.29 per cent.
Why are foreign investors running away from the domestic market?
The continuous withdrawal of foreign portfolio investors (FPIs) from the Indian stock market remains a matter of concern for investors and experts. There has been ‘selling’ by foreign investors in 8 months out of 12 this year. The stay is the result of several major global and domestic factors.
Main reasons for withdrawal:
Attractions of China: Due to the big stimulus packages announced by the Chinese government to bring its economy back on track, foreign investors are withdrawing money from expensive markets like India and investing it in cheap Chinese stocks. It is called ‘Buy China, Sell India’ Is being called a strategy.
Expensive Valuation: The Indian stock market is close to its historical high. Compared to other emerging markets, India’s PE ratio is much higher, due to which foreign investors are finding it better to book profits here.
US Bond Yields and Dollar: Due to uncertainty regarding interest rates in America and the strength of the dollar index, investors are withdrawing money from risky emerging markets and investing in safe American bonds.
Weak Corporate Results: The financial results of many big Indian companies have not been as per expectations in recent quarters, which has hurt investor confidence.
Also read: America trapped in its own trap! Trump’s tariff bet fails, companies on the verge of bankruptcy
Market dependent on domestic investors
Although, domestic institutional investors The market is stable on the strength of (DII) and retail investors, but for long-term growth, the return of foreign investors is necessary. For now, global instability and geopolitical tensions have forced them to ‘wait and watch’ Has been put in position.
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