New Delhi
The foreign institutional investors (FIIs) have sold off equities worth ₹20,024 crore in the past week, leading to a decline of approximately 2.5% in major stock indices, including Nifty and Sensex. This trend highlights one of the most substantial selling sprees in recent years, with total FII net selling in October surpassing ₹1,00,149 crore, surpassing even the levels seen during the pandemic and the 2008 global financial crisis. Data from the National Stock Exchange (NSE) on Saturday.
The outflow of capital is primarily attributed to disappointing second-quarter earnings and cautious outlooks from several sectors. Shrikant Chouhan, Head of Equity Research at Kotak Securities, remarked, ‘FIIs turned net cash sellers to the tune of ₹1,00,149 crore to date in October. Market sentiment continued to be weighed down by weaker-than-expected Q2 FY25 earnings prints and continued weak commentary. FPI flows are expected to remain volatile.’
This massive withdrawal from Indian equities has affected cumulative net FII investments for 2024, which now stand at a modest ₹14,820 crore. The shift in investor sentiment has led many foreign investors to reallocate their funds to markets in Japan and China, which have shown signs of recovery and growth.
Despite the heavy selling from FIIs, domestic investors have played a crucial role in cushioning the market impact, contributing ₹97,090 crore in equity purchases throughout October. As a result, both the Nifty 50 and Sensex are only down about 7% from their 52-week highs, indicating robust support from local investors.
With global and domestic factors continuously shaping market dynamics, the trend of FII outflows will be closely monitored as Indian markets approach the final quarter of the year.
