FPI Outflows Continue In Nov, Investors Dump Equities Worth Rs 21,612 Crore. Find Out Why

Foreign portfolio investors (FPIs) continued to withdraw from Indian equities in November, official data from the depositories revealed. The investors dumped equities worth Rs 21,612 crore in the month, while the investors poured in Rs 1,217 crore in the debt general limit and Rs 3,034 crore towards the debt Voluntary Retention Route (VRR) during November.This outflow from equities was attributed to the increasing US bond yields, the improving dollar, and an expectation of a slowdown in the Indian economy, reported PTI. While equities outflow continued in November, the intensity was significantly reduced in comparison to October when the investors withdrew a record Rs 94,017 crore.Sharing an outlook, Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, said, “The flow of foreign investments into Indian equity markets will hinge on several key factors. These include the policies implemented under Donald Trump's presidency, the prevailing inflation and interest rate environment, and the evolving geopolitical landscape.The expert further noted that the financial earnings of Indian firms during the third quarter and the economy’s progress on the growth front will be key factors in influencing sentiment in the market and foreign inflows.Overall in 2024, the FPIs clocked a net outflow of Rs 15,019 crore so far. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “A perplexing feature of the recent FPI activity is their highly erratic nature. For instance, during November 23-25, FPIs were buyers, however, in the next two days they again turned massive sellers having sold equity worth Rs 16,139 crore.”Also Read : Donald Trump’s Tariffs Could Impact The Profit Margins Of Carmakers By Up To 17 Per Cent, Says S&P"Overall, November experienced net outflow but FPIs staged a notable reversal at the beginning of the week ended November 29, due to decisive victory of the BJP-led Mahayuti alliance in the Maharashtra Assembly elections. The resulting political stability appears to have strengthened investor confidence. Another factor that contributed to this buying activity is the rebalancing of MSCI's key indices, which added few select Indian stocks in its index," Srivastava added.