Foreign Investors Pull Back from Indian Equities Amid High Valuations

Foreign investors have sold Rs 21,201 crore worth of Indian equities in August, driven by high market valuations. While FPIs have shed Rs 32,684 crore through exchanges, they also invested Rs 11,483 crore in the primary market. Domestic investors have been net buyers, largely offsetting the outflows.

Foreign investors have been retreating from Indian equities, selling shares worth Rs 7,769.73 crore from August 12 to 17, causing their net investment for the month to turn negative. This trend marks a significant withdrawal, with Foreign Portfolio Investors (FPIs) unloading net equities valued at Rs 21,201 crore throughout August.

Data from the National Securities Depository Limited indicates that foreign investors are now net sellers, offloading Rs 32,684 crore worth of equities via stock exchanges. Despite this aggressive selling, FPIs have also made Rs 11,483 crore in investments through the primary market and other categories, suggesting they still see selective opportunities for investment.

Market experts believe high valuations in the Indian market are driving this selling trend. Indian stocks are currently among the most expensive globally, prompting foreign investors to seek better value in cheaper markets. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasized that this trend is likely to persist. While the Indian market remains high-valued, selling by FPIs is expected to continue even amid easing concerns of a U.S. recession.

Interestingly, as foreign investors remain net sellers, domestic institutional investors have stepped in as net buyers. According to NSE data, domestic investors have purchased a net Rs 34,060.09 crore worth of equities in August, compensating for the significant outflows by foreign entities. (ANI)

(With inputs from agencies.)