Foreign investors sell Rs 11,412 crore this week, Experts say Maharashtra election result may trigger inflows

Foreign investors extended their selling spree in Indian equity markets for the third consecutive week in November, according to data released by the National Stock Exchange.

This week alone, foreign investors sold equities worth Rs 11,412 crore, adding to the ongoing selling pressure.

With this, the net selling by foreign investors in November has reached Rs 41,872 crores, indicating persistent bearish sentiment from overseas players. The consistent outflow has weighed on market sentiments, creating volatility in the indices.

Meanwhile, domestic institutional investors (DIIs) have continued to provide much-needed support to the Indian markets.

"The results of the Maharashtra elections have the potential to increase the confidence of foreign investors and trigger inflows, given that the main benchmarks have seen a compression in valuations. Over USD 14 billion have left Indian equities since end September. Seasonality between now and the end of the year has historically been bullish, so it certainly seems like foreign flows will be the catalyst that will trigger a larger recovery in stocks". said Akshay Chinchalkar, Head of Research at Axis Securities.

He further added, "The total FII selling through the exchanges for the period 1st October through 23rd November stands at a whopping Rs 155730 crore. This is the kind of selling that happens in a year when FIIs are on selling mode".

This week, DIIs purchased equities worth Rs 11,035 crore, cushioning the impact of foreign outflows. Their total net buying in November now stands at Rs 37,559 crore.

The contrasting activity between foreign investors and domestic institutions highlights differing perspectives on the market. While foreign investors seem cautious, DIIs remain optimistic, helping stabilize the indices amid global uncertainties.

"The relentless selling by FIIs continued in November till 22. After selling equity for Rs 113858 crores through exchanges in October, FIIs have sold another Rs 41872 crore of equity through exchanges in November through 22nd. The trend of FII buying through the primary markets also continued with Rs 15339 crore worth buying in November through 22nd" said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

In October, FPIs marked their single highest monthly selling activity ever, with a record Rs 1,13,858 crore worth of shares sold through the exchanges. The scale of this outflow highlights the cautious approach FPIs have taken towards Indian equities.

However, despite this heavy selling in the secondary market, FPIs have remained active buyers in the primary market.