Massive Withdrawals: Foreign Investors Pull ₹85,790 Crore from Indian Equities

Foreign investors are pulling out of the Indian market. This month, they have withdrawn ₹85,790 crore (around USD 10.2 billion) from equities.

The withdrawals are influenced by Chinese stimulus measures, appealing stock valuations in China, and high domestic equity prices.

October is the worst month ever for money leaving India. Investors have taken out more money than before.

The last record was in March 2020 when ₹61,973 crore was withdrawn.

This month’s money outflow comes after a big investment of ₹57,724 crore in September 2024.

Since June, foreign portfolio investors (FPIs) have consistently bought equities after withdrawing ₹34,252 crore in April and May.

Overall, FPIs have been net buyers in 2024, except for January, April, and May, according to depository data.

Looking ahead, global factors will influence foreign investment in Indian equities. Geopolitical developments and interest rate movements are key considerations.

Himanshu Srivastava from Morningstar Investment Research India said, speaking to Business Standard, that domestic indicators like inflation, corporate earnings, and festive season demand will also be important for FPIs evaluating the Indian market.

Foreign portfolio investors (FPIs) took out ₹85,790 crore from Indian stocks between October 1 and 25.

This has made the market feel less confident. Because of this, the NSE's Nifty index has dropped by 8% from its highest point.

This month’s money outflows were also caused by worries about global events and changes in the economy.

Experts say that concerns about safety and problems in China made investors more careful. They are moving their money to safer markets.

With the upcoming US elections and rising US bond yields, FPIs have also pulled funds from many emerging markets, including India.

During this period, FPIs withdrew ₹5,008 crore from the debt general limit.

They also invested ₹410 crore through the Voluntary Retention Route (VRR).

So far this year, FPIs have invested ₹14,820 crore in equities and ₹1.05 lakh crore in the debt market.