Key Points
- FPIs sold ₹26,533 crore worth of Indian equities in November 2024.
- November’s outflow is lower than October’s record ₹94,017 crore.
- Total FPI net selling in 2024 is ₹19,940 crore.
- Analysts expect the selling trend to slow down soon.
- Weak Q2 earnings, high stock valuations, and global factors contributed to FPI outflows.
Looma News
Foreign Portfolio Investors (FPIs) continued their selling streak for the eighth week in a row, offloading ₹26,533 crore (about $3.14 billion) worth of Indian equities by November 22, according to data from depositories. While this marks another month of outflows from Indian markets, the pace of selling has slowed compared to October, when FPIs sold a record ₹94,017 crore. The October figure remains the highest monthly outflow this year.
As of November 22, the total net selling by FPIs in Indian equities for 2024 stands at ₹19,940 crore. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the total FPI selling from October 1 to November 22 was ₹155,730 crore ($18.5 billion). He explained that such large-scale sell-offs usually happen when foreign investors are consistently selling. However, Vijayakumar expects the trend to slow down soon. He linked the selling to concerns over weak Q2 corporate earnings, high stock valuations, and the end of the “Sell India, Buy China” strategy. He also mentioned that the “Trump trade,” which had attracted foreign investors, seems to be nearing its end due to high valuations in the US market.
Himanshu Srivastava, Associate Director at Morningstar Investment Research India, acknowledged the ongoing outflows but pointed out that the amount of selling has significantly decreased from October’s massive ₹94,017 crore outflow. Srivastava believes that most of the selling has already been done. He suggested that future foreign investment in Indian equities will depend on various factors, including US policy under Donald Trump, inflation and interest rate trends, geopolitical issues, and the third-quarter earnings of Indian companies. Despite the reduced outflows, the main reasons behind the selling, particularly the high valuations of Indian stocks, are still in place, which has led investors to look for better opportunities in other markets. Srivastava also mentioned that the strength of the US Dollar and rising US Treasury yields may have drawn foreign capital to the US market, as investors expect better economic growth there.
