Foreign Portfolio Investors (FPIs) resumed selling in November, pulling back a net ₹3,765 crore from Indian equity markets. This marked a sharp reversal after October, when FPIs had invested a net ₹14,610 crore, breaking a long spell of outflows from the domestic market.
The renewed selling was driven by a mix of global and domestic factors. On the international front, investors remained cautious due to uncertainty around the US Federal Reserve’s interest rate decisions, a strong US dollar, and volatility in global technology stocks. Geopolitical tensions and fluctuating crude oil prices also added to market jitters, prompting FPIs to reduce their exposure.
Within India, some sectors were considered overvalued after strong gains earlier in the year, while weak industrial data further dampened sentiment. Analysts observed that the selling was broad-based, affecting major sectors such as IT services, consumer services, and healthcare.
Despite the outflow, experts stressed that the trend may not indicate a sustained withdrawal of foreign funds. FPIs have shown mixed behaviour in recent weeks, buying and selling on different days, suggesting that market flows could change quickly if global and domestic conditions improve.
Looking ahead, foreign investment trends in December will likely depend on key developments, including signals from the US on interest-rate cuts and progress in India-US trade talks. Market watchers said that while FPIs are temporarily cautious, India’s relatively stable macroeconomic fundamentals and strong corporate earnings could attract fresh inflows if uncertainties ease.
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