Mumbai: The cumulative selling by Foreign Portfolio Investors (FPIs) in Indian equities has crossed the significant threshold of Rs 1 lakh crore, reaching Rs 102,931 crore as of October 24. Despite this substantial outflow, the Indian stock market has demonstrated remarkable resilience.
In the past week alone, FPIs withdrew Rs 20,024 crore from Indian equities, leading to declines of 2.7% and 2.2% in the Nifty and Sensex indices, respectively. However, the market’s overall stability can be attributed to robust primary market activities. FPIs invested Rs 17,145 crore in primary markets, driven by several large Initial Public Offerings (IPOs).
Market experts suggest that the ongoing FPI selling is influenced by various global factors, including the Chinese stimulus measures and the attractive valuations of Chinese stocks1. Additionally, the elevated valuations in India have made it a prime target for FPI sell-offs.
Despite the persistent selling pressure, domestic economic indicators remain strong. The recent Purchasing Managers’ Index (PMI) data and the Reserve Bank of India’s (RBI) optimistic economic growth forecast for FY25 highlight the potential for economic recovery in the second half of the fiscal year. This positive outlook is expected to encourage investors to accumulate quality stocks.
