Foreign portfolio investors (FPIs) changed from being continuous sellers for the previous two months to net purchases in the first week of November in Indian markets, ahead of the critical US Federal Reserve meeting. The FPIs invested $15,280 crore in Indian shares in November in expectation of a possible Fed rate cut and highly adverse comments. Previously, FPIs made significant purchases of Indian stocks totaling $51,200 crore in August.
They purchased shares in July for over 5,000 crores. Before that, beginning in October of last year, foreign investors were net sellers of Indian stocks for a nine-month period. FPIs started out October as sellers, but the sell-off slowed significantly as the US markets began to rise due to extremely negative sentiment.
The US Fed increased interest rates by another 75 basis points last week and then issued extremely pessimistic commentary. However, several US Fed officials informed the media the day after the rate hike was announced that they anticipated the pace to decrease if inflation remained low.
As a result, US stock markets rose once more on Friday. Compared to the nearly record short positions they held a few months ago, FPIs have suddenly gone net long in the index futures segment, according to data specialists. According to experts, future FPI declines in India will be influenced by changes in the dollar index, US bond yields, and world crude oil prices. FPIs become net purchasers and invest $15,280 billion in stocks