Foreign portfolio investors (FPIs) are on course to turn net sellers in Indian stock markets for the second consecutive month through November, after having remained net buyers for four straight months until September.
So far in November, FPIs have sold stocks worth Rs 26,533 crore in India, National Securities Depository Limited (NSDL) data showed. In October, they sold stocks worth Rs 94,017 crore, marking the highest-ever outflow in a single month.
In contrast, during the months of June, July, August, and September, FPIs had been net buyers, purchasing stocks worth Rs 26,565 crore, Rs 32,365 crore, Rs 7,320 crore, and Rs 57,724 crore, respectively.
FPIs had played a key role in fueling the stock market’s bull run, except during the recent slump. Foreign Portfolio Investment (FPI) involves an investor buying foreign financial assets, as per its definition.
The Sensex has fallen from its all-time high of 85,978 points to its current trading level of 79,117 points. Recent market sessions have been bearish for the indices due to fund outflows, lower-than-expected Q2 earnings of India Inc., and high inflation.
“…the FII selling in India is likely to taper off soon. Also valuations of largecaps in India have come down from the elevated levels. FIIs have been buying IT stocks and this has been imparting resilience to IT stocks. Banking stocks have been resilient despite FII selling, mainly due to DII buying,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Interestingly, at a time when overseas investors were net sellers in Indian equities, domestic institutional investors (DIIs) stayed net buyers, largely compensating for the outflows by foreign investors. DIIs accumulated stocks worth thousands of crores more than FPIs in October, data showed, which has likely cushioned the stock indices from a steeper fall.
