Foreign investors aggressively selling Indian stocks; offloaded Rs 24,734 crore in January

Foreign portfolio investors have been aggressively selling Indian stocks, turning net sellers in the Indian equity market so far in January 2024, after making a beeline to accumulate domestic stocks during the past two months--November and December.

The latest data available from the National Securities Depository Limited (NSDL) showed that the FPIs sold Indian stocks worth Rs 24,734 crore in January.

"So far in January, equities experienced FPI outflows as investors exercised caution on Ems (emerging markets), partly in response to rise in US yields," CARE Ratings said in a report.

"However, FPI inflows in debt have sustained, supported by India's inclusion in JP Morgan bond index and potential inclusion in Bloomberg EM Local Currency indices, and have largely offset the equities outflows," CARE Ratings added.

The selling of stocks by FPIs lately has led to some corrections in Indian benchmark stock indices.

In December, especially, they made a beeline to invest in Indian stock markets, with a cumulative accumulation of Rs 66,135 crore.

To put it into context, the entire year saw an inflow of about Rs 171,107 crore, and notably, over one-third of it came in December.

The strong inflow of funds from foreign portfolio investors (FPIs) had then supported the benchmark stock indices to march towards all-time highs.

In November, the FPI inflow was Rs 9,001 crore, NSDL data showed.

Before November, FPI participation in Indian stocks was lukewarm, and they had turned net sellers. They sold Rs 14,768 crore and Rs 24,548 crore, in September and October, respectively.

Before that, FPIs bought Indian stocks worth Rs 7,936 crore, Rs 11,631 crore, Rs 43,838 crore, Rs 47,148 crore, Rs 46,618 crore, and Rs 12,262 crore in March, April, May, June, July, and August respectively, data showed.