FPIs withdraw Rs 22194 crore in January amid weak earnings outlook, rising dollar: Foreign investors i.e. FPI have withdrawn Rs 22,194 crore from the Indian stock markets so far in January. FPIs are selling amid the possibility of weak quarterly results of companies, strengthening of the dollar and fear of intensification of the tariff war under the Donald Trump administration.
According to depository data, foreign investors have withdrawn Rs 22,194 crore from shares till January 10 this month. FPIs have been net sellers in all trading sessions except January 2. Earlier in the month of December, FPI had invested Rs 15,446 crore in the Indian stock market. Amidst disruptions on the global and domestic front, foreign investors have reduced their investments in Indian stocks. Last year i.e. in 2024, FPIs made a net investment of only Rs 427 crore in Indian shares. Whereas in 2023, he had invested a huge amount i.e. Rs 1.71 lakh crore in the Indian stock market.
Also read: Market Outlook: Market movement will be decided by inflation data, quarterly results of companies and FII stance, investors will keep an eye on these.
Reason to lose confidence in Indian market
Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said that many factors are responsible for the withdrawal of foreign funds from Indian markets. These include the possibility of weak quarterly results of companies, the possibility of a tariff war in the Trump administration, slowness in the growth rate of Gross Domestic Product (GDP), high inflation and confusion about the beginning of the phase of interest rate cuts in India. Apart from this, FPIs are also selling due to record low level of Indian rupee, rise in US bond yield and higher valuation of Indian stock market.
VK Vijayakumar, chief investment strategist, Geojit Financial Services, said that the only major reason for the continuous selling by FPIs is the continuous rise in the dollar index, which is now above 109. The yield on 10-year bonds is above 4.6 percent, due to which investors are withdrawing from emerging markets.
