Concerns over the third-quarter earnings season and the high valuations of domestic companies caused foreign investors to withdraw Rs 4,285 crore from Indian stocks during the first three trading days of the month.
Data from the depositories indicated that Rs 15,446 crore was invested throughout December. This emotional change coincides with internal and international challenges.
The report indicates that during the first three trading sessions of the month (January 1–3), foreign portfolio investors (FPIs) sold shares worth Rs 4,285 crore from Indian stocks. This continued pattern of withdrawals reflects the uncertainty among international investors.
FPI sentiment has been further impacted by the rupee’s decline versus the dollar since currency risk reduces the appeal of Indian investments. To make matters worse, investor confidence has not increased despite the US Federal Reserve’s suggestion that it may cut rates less this year.
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.
