Foreign portfolio investors have turned net sellers in the Indian stock market so far in January 2024, after making a beeline to accumulate domestic stocks during the past two months – November and December.
The latest data available from the National Securities Depository Limited (NSDL) showed that the FPIs sold Indian stocks worth Rs 16,601 crore in January.
The selling of stocks by FPIs lately led to some correction in Indian benchmark stock indices. They cumulatively declined 2 per cent during the past five sessions.
In December, especially, they made a beeline to invest in Indian stock markets, with a cumulative accumulation of Rs 66,135 crore. To put it into context, the entire year saw an inflow of about Rs 171,107 crore, and notably, over one-third of it came in December. The strong inflow of funds from foreign portfolio investors (FPIs) lately also supported the stocks to march towards all-time highs.
In November, the FPI inflow was Rs 9,001 crore, NSDL data showed.
Before November, FPI participation in Indian stocks was lukewarm, and they had turned net sellers. They sold Rs 14,768 crore and Rs 24,548 crore, in September and October, respectively. Before that, FPIs bought Indian stocks worth Rs 7,936 crore, Rs 11,631 crore, Rs 43,838 crore, Rs 47,148 crore, Rs 46,618 crore, and Rs 12,262 crore in March, April, May, June, July, and August respectively, data showed.
“The trigger for the (latest) correction came mainly from the sustained selling by FIIs who have sold equity…during the last 5 days,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services. On Tuesday, benchmark Sensex declined over 1,000 points, wiping off lakhs of crores from investors’ kitty.
“Some news and rumours also contributed to the selling in the market. There is news that SEBI is tightening the ultimate beneficiary norms for FPIs starting February 1st. This might have triggered some FPI selling,” Vijayakumar said.
