Substantiate slowdown in FPIs selling this week as compared to last week, FPI sold equities worth Rs 2426 crore this week

The pace of selling by foreign portfolio investors (FPIs) in the Indian equity market slowed down in the second week of November, according to data from the National Securities Depository Limited (NSDL). The data highlighted that between November 11 and November 14, FPIs recorded net sales of Rs 2,426 crore, significantly lower than the massive outflow of Rs 19,994 crore during the first week of November (November 4-8).

Despite the reduced pace of selling, the overall FPI selling trend remains negative. For the month of November so far, foreign investors have pulled out a total of Rs 22,420 crore from Indian equities.

This marks a continued streak of net outflows, reflecting cautious sentiment among global investors amid uncertain market conditions.

The sustained selling pressure has also turned FPIs' net investment in equities negative for the year 2024. As of now, the net selling by FPIs in the equity segment stands at Rs 15,827 crore, reversing the positive flows seen earlier in the year.

The FPI outflows come at a time when the global economic environment is marked by geopolitical tensions, inflationary pressures, and central bank actions, which have made investors more risk-averse.

Analysts believe that foreign investors are reallocating their portfolios towards safer assets or other emerging markets, impacting India's equity market dynamics.

Ajay Bagga, Banking and Market expert told ANI, "The selling intensity by FPIs seems to be reducing as per the data from the last week. A big flip is that post the Trump victory, there is a rerating of China downwards and India has emerged as a potential beneficiary of a China+1 move. 

The major global flows are going to US and Japan equity markets. EMs are seeing outflows.

He further added "however in anticipation of Trump admin economic policies and the Trump preference for a weaker US dollar we can expect a reversal in EM flows. FPI selling intensity weakening is the initial impact of this re rating".

Market participants will be closely monitoring the trends in FPI flows in the coming weeks as they remain a crucial driver for domestic market performance.