FPI selling eases this week, but October marks highest monthly sell-off in history with Rs 77,701 crore: Withdrawal of foreign investors from Indian shares continues. Compared to last week, the pace of withdrawal of foreign investors from Indian shares was slow this week.National Securities Depository Limited (NSDL) This information has come to light from the data.Between October 14 and October 18, foreign investors (FPIs) sold shares worth Rs 19,065.79 crore. Whereas before this, in the last week the FPO had sold shares worth Rs 31,568.03 crore.Despite slow selling, October recorded the highest ever outflows by FPIs.
Foreign investors have sold shares worth a total of Rs 77,701 crore so far in October, which is more than the sales in March 2020 due to the Covid pandemic (COVID-19). In March 2020, FPIs had sold shares worth Rs 61,972.75 crore. Now the month of October 2024 has become historic for FPIs in terms of withdrawal from Indian shares.
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Banking and markets expert Ajay Bagga told ANI that markets had expected regular and sharp Federal Reserve rate cuts after the surprise 50 basis point cut in September. However, US economic data since then has shown a strong economy, with a ‘no-landing’ situation. This has strengthened the US dollar, which has increased in the last three weeks. American yields have also increased. These factors have a negative impact on flows into emerging markets. Part of the FII withdrawals in India were due to this, along with the announcement of China’s stimulus which led to a sharp rise in Chinese markets. Interestingly, despite significant selling, major stock market indices like Nifty 50 and Sensex have shown strength. Both indices are down only about 5 per cent from their 52-week highs, reflecting strong support from domestic investors.
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National Stock Exchange (NSE) data shows that domestic investors, including domestic institutional investors (DIIs), have infused significant capital into the market. In October alone, they invested Rs 74,176.20 crore in stocks, which helped absorb selling pressure by FPIs and prevented more severe declines.
Bagga said India represents higher market levels that have historically higher valuations, which appear more bullish given the slow economy, persistent inflation, high taxes and high interest rates. Additionally, in this adverse macroeconomic environment, we have seen disappointing earnings announcements across various sectors. Due to this, FII withdrawal from Indian markets has continued. This balance between foreign outflows and strong domestic participation shows that local investors are increasingly important in stabilizing the Indian stock market, despite heavy selling by global investors.