FPIs continue to sell; in January, they took Rs 64,000 crore out of stocks.

Due to the weakening of the rupee, the increase in US bond yields, and the prospect of a weak earnings season, foreign portfolio investors (FPIs) have withdrawn Rs 64,156 crore (USD 7.44 billion) from the Indian equities markets so far this month. According to data from the depositories, this followed an investment of Rs 15,446 crore for December.

The change in attitude coincides with both internal and international challenges. Foreign investors are pulling money out of the Indian equity markets due to the ongoing devaluation of the Indian rupee, which puts a lot of pressure on them.

The report shows that as of the 24th day of January, shares worth Rs 64,156 crore had been sold by Foreign Portfolio Investors (FPIs) from Indian stocks. Except for January 2, all days this month have seen FPIs selling.

The financial sector has been the hardest hit by FPI selling because it holds most of the assets under management. However, IT saw some purchasing when the industry’s outlook improved and management made encouraging remarks.

FPIs have also been sellers in the debt market due to the allure of US bond yields. They took Rs 5,124 crore out of the debt voluntary retention route and Rs 4,399 crore out of the general limit. With net inflows of only Rs 427 crore in 2024, foreign investors dramatically reduced their investments in Indian equities, indicating a cautious posture generally.

The remarkable net inflows of Rs 1.71 lakh crore in 2023, which were fueled by optimism about India’s solid economic fundamentals, stand in stark contrast to this. In contrast, a net outflow of Rs 1.21 lakh crore occurred in 2022 as a result of aggressive rate hikes by central banks around the world.

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