Net Equity Investment Turns Positive This Week, Foreign Investors Sold Less In November Vs October

Mumbai: Foreign Portfolio Investors (FPIs) sold equities worth Rs 21,612 crore in November, marking a significant decline in selling compared to Rs 94,017 crore in October, according to data released by the National Securities Depository Limited (NSDL).

Despite the overall outflows in November, the week from November 25-29 witnessed a positive shift, with net FPI investments in equities turning positive at Rs 4,921.5 crore.Market experts noted that the recent improvement reflects cautious optimism amid evolving global and domestic conditions. 

However, challenges remain. Analysts observed that foreign investments will be influenced by a combination of factors, including India's latest GDP data, which came in below expectations, and the continuing preference of investors for the US market.

Ajay Bagga, Banking and Market Expert noted that "There was talk of FPIs pivoting to net inflows finally this week but the US holiday shortened global trading week saw FPIs selling again the last two days. The US market remains the favoured market in terms of flows with EMs seeing outflows with a few bright spots like the turnaround Argentina market".

He further noted that "With India GDP numbers, a lagged indicator, coming below airheads lowered expectations, a lot will now depend on counter cyclical fiscal and monetary measures by the government and the RBI respectively. Liquidity is tight age bank credit is also slowing down, Sine policy stimulus will be needed now".

In June, July, August, and September, the FPIs bought stocks worth Rs 26,565 crore, Rs 32,365 crore, Rs 7,320 crore, and Rs 57,724 crore, respectively. As per definition, Foreign Portfolio Investment (FPI) involves an investor buying foreign financial assets.

Recently after the US elections the Foreign investors become seller in Indian markets amid the strengthening of dollar and the surge in flows to the US markets.As global markets continue to influence investment trends, the coming weeks will be critical in determining whether the recent positive momentum in FPI investments can be sustained.