FPIs resume selling in November; From equity Rs. 3,765 crore withdraw

After a brief hiatus in October, foreign investors pulled a net Rs. 3,765 crore had resumed sales.

This reduction in November was Rs. 14,610 crore came after a net inflow, breaking a three-month streak of withdrawals – in September Rs. 23,885 crore in August, Rs. 34,990 crore and in July Rs. 17,700 crore, according to depository data.

Flow trends through November were shaped by a combination of global and local factors.

On the global front, uncertainty surrounding the US Federal Reserve’s rate-cut path, a strong US dollar and risk weakness in emerging markets kept foreign investors cautious. Persistent geopolitical tensions and volatile crude prices have reinforced risk aversion, said Himanshu Srivastava, Principal Research, Morningstar Investment Research India.

Domestically, this caution was compounded by pockets of stretched valuations and weak industrial indicators, which added to investor confidence despite India’s relatively stable macroeconomic backdrop, he added.

Reflecting this sentiment, Waqarjaved Khan, senior fundamental analyst at Angel One, noted that outflows in November were mainly driven by global risk aversion and volatility in tech stocks. IT services, consumer services and healthcare were among the sectors that faced a sharp impact.

However, not all indicators point to a continued bearish trend.

VK Vijayakumar, chief investment strategist at Geojit Investments believes there is no clear evidence of a trend reversal in FPI flows yet. He noted that FPIs were buyers on some days and sellers on other days, which is an indication that the flow may change as conditions evolve.

The latest rally, with both Nifty and Sensex hitting new records on November 27 after a 14-month wait, improved Q2 corporate earnings and expectations of further growth in Q3 and Q4, he added.

Looking ahead, Angel One’s Khan said FPI activity in December will likely depend on the US Federal Reserve’s rate-cut signals and progress on the trade agreement between India and the US.

So far in 2025, FPIs have invested Rs. 1.43 lakh crore has been withdrawn. Meanwhile, in the debt market, FPIs under the normal limit of Rs. 8,114 crore was invested while during the same period through voluntary retention route Rs. 5,053 crore was withdrawn. PTI