fpi investment
Foreign portfolio investors (FPIs) have pulled out Rs 4,285 crore from Indian stock markets in the first three trading sessions this month due to apprehensions ahead of companies’ third quarter results and high valuations of domestic stocks. This information has been obtained from depository data. Earlier, in the entire month of December, FPI had invested Rs 15,446 crore in shares. There has been a change in the perception of FPIs amid global and domestic challenges. “As long as the dollar remains strong and US bond yields remain attractive, FPI selling is likely to continue,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services. The dollar index is currently around 109 and the yield on 10-year bonds is more than 4.5 percent. Because of this, FPIs are withdrawing.
Shares worth Rs 4,285 crore sold in 3 days
According to the data, during January 1 to 3, FPIs sold shares worth Rs 4,285 crore. The uncertainty among foreign investors is reflected in the current withdrawal trend. Himanshu Srivastava, associate director-manager research, Morningstar Investment Research India, said, “Foreign investors have adopted a cautious approach ahead of companies’ third quarter results. Apart from this, investors are also being cautious because of the possible policies of US President-elect Donald Trump and his impact on global markets.
Impact of weak rupee also
The fall in the rupee against the dollar has further weakened FPI sentiment as currency risks have made Indian investments less attractive. Moreover, signals from the US Federal Reserve that it may cut interest rates this year have also failed to boost investor confidence. Talking about the domestic front, FPIs are selling mainly due to high valuations. Overall, the trend reflects a cautious stance by foreign investors, who have made a net investment of just Rs 427 crore in Indian stocks in 2024. In 2023, FPI had invested Rs 1.71 lakh crore in Indian shares. At the same time, in the year 2022, FPI had sold Rs 1.21 lakh crore.
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