FPI: The last week was one of the worst trading weeks for the Indian stock market when there was a huge sell-off in the stock market. Now while foreign institutional investors are withdrawing money from the stock market, there is a huge outflow of selling by foreign portfolio investors (FPIs). The trend of selling by foreign portfolio investors (FPIs) in the Indian stock market continues. This month, FPIs have so far withdrawn Rs 85,790 crore or $ 10.2 billion from the Indian market.

Why is money flowing out of Indian stock markets

Due to China's incentive measures, attractive valuation of shares there and high valuation of shares in Indian markets, FPIs are continuously selling in the Indian market. Earlier in September, FPIs had invested Rs 57,724 crore in the Indian stock market, which is a 9-month high level of their investment. According to the data, FPIs have withdrawn a net Rs 85,790 crore from the Indian stock market between October 1 and 25. Due to the continuous withdrawal of money by FPIs, the market sentiment has been affected, due to which NSE's Nifty has come down by eight percent from its high level.

October proved to be the worst month

The month of October is proving to be the worst in terms of withdrawal of money from foreign funds. If we look at the data of the previous bad months, in March 2020, FPIs had withdrawn Rs 61,973 crore from shares. So far this year, FPIs have invested Rs 14,820 crore in shares and Rs 1.05 lakh crore in the debt or bond market.

Foreign portfolio investors were continuously buying since June

According to the data of the depository, foreign portfolio investors were continuously buying in the domestic stock markets since June 2024. In April-May, they had definitely withdrawn funds worth Rs 34,252 crore.

What do market experts say?

Himanshu Srivastava, Associate Director and Research Manager, Morningstar Investment Research India, said that in future, FPI investment in the Indian market will depend on global events such as geo-political situation and fluctuations in interest rates. He said that on the domestic front, FPI will keep an eye on the inflation trend, quarterly results of companies and the demand of the festive session.

VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that there is no possibility of any immediate change in the continuous selling trend of FPIs. Due to the incentive measures taken by China, FPIs are turning towards the market there. Apart from this, due to high valuations in India, FPIs are also playing the role of sellers.