FPI Inflows to India Decline Amid Market Volatility

Foreign Portfolio Investment (FPI) in India saw a sharp fall this week due to market volatility and fears of US interest rate cuts. Despite the weekly dip, overall FPI for September remains positive, suggesting continued confidence in the Indian market.

Foreign Portfolio Investment (FPI) in India witnessed a significant decline this week amid market volatility driven by concerns over possible interest rate cuts by the US Federal Reserve. Data from the National Securities Depository Limited (NSDL) revealed net FPI inflows at Rs 5,830 crore, a sharp drop from Rs 16,881 crore recorded the previous week.

Domestic investors also demonstrated a bearish trend, particularly on Friday, contributing to a net selling of Rs 635 crore for the week. This negative shift indicates a cautious approach by domestic investors as markets hit all-time highs.

Despite the slowdown, overall FPI investments remain positive for September, with net inflows reaching Rs 33,691 crore. This continued growth suggests foreign investors' sustained confidence in the Indian market, which could make September the highest FPI investment month for 2024.

While the weekly dip reflects short-term caution, the long-term outlook for foreign investment in India remains optimistic. Steady FPI inflows underscore the growing attractiveness of Indian markets, supported by strong economic fundamentals and improving corporate earnings.

In August, net foreign investment in Indian equities dropped to Rs 7,322 crore, marking the lowest monthly investment in three months. This decline contrasts sharply with July's Rs 32,359 crore investment by foreign portfolio investors.

Throughout August, foreign investors were largely net sellers in the Indian equity market, according to NSDL data. (ANI)

(With inputs from agencies.)