Selling Spree Shows No Signs of Slowing As FPIs Withdraw Rs 22,400 Crore In November

New Delhi: Foreign portfolio investors (FPIs) extended their selling streak in Indian markets during the first half of November, driven by global factors such as rising US bond yields and an uptrend in US markets following Donald Trump’s victory in the presidential elections. The US Federal Reserve’s latest interest rate cut and its indication of no immediate plans for further cuts have also influenced investor sentiment.

Record FPI Outflows In OctoberOctober witnessed a record FPI sell-off as geopolitical tensions in the Middle East and attractive valuations in Chinese markets led to massive outflows. Data from the National Securities Depository Ltd (NSDL) revealed that FPIs offloaded Indian equities worth Rs 22,420 crore in October. When combined with outflows in debt, hybrid, and other segments, the total FPI outflow for October reached a 10-month high, marking the steepest sell-off in Indian markets so far this year. November TrendsAs of November 15, FPIs had withdrawn Rs 26,343 crore from Indian markets, including Rs 4,717 crore from debt markets. However, they continued to invest in the primary market, pumping in Rs 9,931 crore, despite pulling Rs 32,351 crore from the secondary market. Debt investments remained modest at Rs 362 crore during this period.

Impact of Donald Trump's PoliciesIn the US, Trump’s victory has had a mixed impact on financial markets. While equity markets surged on optimism around his pro-business policies and promised corporate tax cuts, the bond market faced pressure due to concerns over a potentially rising fiscal deficit under his administration. Challenges Ahead For Indian MarketsThe sustained FPI outflows pose challenges for Indian markets in the near term, as foreign investors adjust their portfolios in response to evolving global and domestic factors. Analysts suggest that these trends could weigh on market performance unless there is a significant shift in investor sentiment or global conditions.