Foreign institutional investors (FIIs) have pulled out a massive Rs 20,024 crore from Indian equities this week alone, resulting in a 2.5 per cent dip in the key stock indices, Nifty and Sensex. Data from the National Stock Exchange (NSE) shows that FIIs have been reducing their exposure to Indian markets significantly, with October witnessing one of the heaviest-selling sprees in recent years.
From October 21 to October 25, FIIs sold equities worth Rs 20,024 crore, adding to the sharp outflow trend observed throughout October. As of this month, the total FII net selling has surpassed Rs 1,00,149 crore, marking a record that exceeds the selling pressure seen during the pandemic and even the 2008 global financial crisis.
The heavy selling has impacted the cumulative net FII investments in India for 2024, which have declined to a modest Rs 14,820 crore.”FIIs turned net cash sellers to the tune of Rs. 1,00,149 crores, to date in Oct’24, Market sentiment continued to be weighed down by weaker-than-expected Q2FY25 earnings prints and continued weak commentary. FPI flows are expected to remain volatile” said Shrikant Chouhan, Head of Equity Research, Kotak Securities.
The shift comes as foreign investors are reallocating their funds from Indian markets to other economies like Japan and China, which have recently shown signs of growth and are becoming more attractive investment destinations. This trend follows a strong week of FII selling from October 14 to October 18, when investors sold Indian equities worth Rs 19,065.79 crore.
Prior to that, they had offloaded equities worth Rs 31,568.03 crore in early October, indicating a consistent exit from Indian markets.Despite the large-scale selling, however, domestic investors have helped cushion the impact, showing resilience in key indices.
Both Nifty 50 and Sensex are only down by around 7 per cent from their 52-week highs, indicating strong support from domestic investors that has prevented a steeper decline.As per NSE data, the domestic investors have infused equities worth Rs 97,090 crore in October to support the selling by foreign investors.
With both global and domestic factors continuing to influence market sentiments, the trend of FII outflows will be closely watched as Indian markets move into the last quarter of the year.
