Foreign Investors Flee: Indian Stocks Under Siege

The Indian stock market has been enduring intense selling attributed to FPIs moving funds to other Asian markets, leading to a Rs 27,142 crore offload in early October. This activity correlates with a strong performance in Chinese stocks and a potential shift in investor strategy.

Amidst a wave of global financial shifts, the Indian stock market is reeling under substantial selling pressure, predominantly driven by Foreign Portfolio Investors (FPIs). Data from the National Securities Depository Limited (NSDL) reveals that FPIs have already sold equities worth Rs 27,142 crore in just the first three trading days of October.

October 4 marked the most substantial offload, with equities worth Rs 15,506 crore being sold by FPIs, reflecting a notable decline in investor confidence. Analysts point to a strategic shift among foreign investors, redirecting their focus towards other Asian destinations like China and Hong Kong for potentially superior returns, thus transforming FPIs into net sellers in the Indian market.

Geojit Financial Services' Chief Investment Strategist, V K Vijayakumar, attributes this trend to the robust performance of Chinese stocks, driven by anticipated economic growth and fiscal incentives. He warns that continued momentum in Chinese markets might sustain the outflow from Indian equities with concerns also rising around Middle East tensions possibly impacting oil field stability, posing a looming threat of further market volatility.

(With inputs from agencies.)