FPIs’ November Investment at ₹1,433 Crores Despite Recent Withdrawals

Foreign Portfolio Investors (FPIs) have purchased shares worth ₹1,433 crores in November after continuously withdrawing from the stock markets over the past two and a half months. The primary reason behind this move is the decline in US Treasury bond yields and crude oil prices.

As of November 15, foreign portfolio investors were net sellers. However, according to depository figures, they altered the trend by investing and selling during November 16-17. Experts now view the ongoing festive season in India as a contributing factor igniting fresh interest from FPIs in the Indian markets.

Market analysts now believe that the US Federal Reserve has completed its task of raising rates and is expected to gradually begin rate cuts in 2024. If the downward trend in the US monetary easing persists, the Federal Reserve might cut rates until mid-2024. They suggest this could smoothen FPI flows in emerging markets like India.

It is evident from the figures that before making new investments, FPIs had sold Indian equities worth ₹24,548 crores in October and ₹14,767 crores in September. Before the outflow, FPIs had been buying Indian equities continuously for six months from March to August. During this period, they invested ₹1.74 lakh crores.

The prolonged selling by FPIs started in September due to various factors, including the uncertain trajectory of US interest rates, an increase in US Treasury bond yields, the impact of high crude oil prices, and escalated geopolitical tensions between Israel and Hamas.

According to statistics, FPIs have invested ₹12,330 crores in the debt market so far in November. In October, this figure was ₹6,381 crores. This year, FPIs’ total investment in equities has exceeded ₹97,405 crores, and in the debt market, it has crossed ₹47,800 crores.