FPIs Turn Net Sellers in Indian Stocks, Highest Offload Recorded in October

Foreign portfolio investors sold a record Rs 94,017 crore in Indian stocks in October, reversing four months of heavy buying. This selling pressure contributed to a downturn in the Sensex, which fell significantly amid disappointing Q2 earnings. Domestic investors' buying partially cushioned the market's fall.

In a significant shift, foreign portfolio investors (FPIs) have reverted to being net sellers in India's stock markets for October, following a strong buying spree over the last four months. The offloaded stocks reached an unprecedented Rs 94,017 crore, as reflected in data from the National Securities Depository Limited.

During the prior months of June through September, FPIs had substantially contributed to the market's bullish trajectory with substantial investments totaling Rs 26,565 crore in June, Rs 32,365 crore in July, Rs 7,320 crore in August, and Rs 57,724 crore in September. However, this trend was interrupted by the latest market slump.

The Sensex, negatively impacted by fund outflows and weaker than expected Q2 corporate earnings, has dropped from its peak value of 85,978 points to 79,389 points. Last Thursday saw the Sensex close down by 553.12 points, a 0.69 percent decrease, with the Nifty also sliding by 0.56 percent. According to Vinod Nair, Head of Research at Geojit Financial Services, market stabilization in the short term hinges on the reduction of FPI sales and the results of the US presidential election.

Despite the heavy selling by FPIs, domestic institutional investors have stepped up as net buyers, accumulating stocks at levels surpassing those sold by overseas investors. Their activity has helped mitigate sharp declines in the stock indices. Recent upticks in the market have been driven by factors such as strong GDP growth, stable inflation, solid domestic liquidity, and favorable monsoon conditions. The earlier FPI investments were also influenced by the political certainty following seamless election results. (ANI)

(With inputs from agencies.)