Foreign Investors Persist with Heavy Selling in Indian Markets Amid Market Volatility

For the third week in November, foreign investors continued to withdraw from Indian equity markets, culminating in a net selling of Rs 41,872 crore. Despite a bearish outlook from overseas, domestic institutional investors have bolstered market stability through strategic investments.

Foreign investors have sustained their withdrawal from Indian equity markets for the third consecutive week in November, dramatically impacting market stability. According to the National Stock Exchange's latest report, foreign entities divested Rs 11,412 crore in equities this week, exacerbating ongoing selling pressure.

This escalates the net selling by foreign investors in November to an alarming Rs 41,872 crores, signalling a persistent bearish outlook from overseas market players. Meanwhile, domestic institutional investors (DIIs) have acted as a bulwark, offering stability and confidence to the jittery Indian markets.

Analysts speculate the results of the Maharashtra elections might restore confidence among foreign investors, spurring potential inflows. Given the historical bullish trend towards the year's end, foreign capital could trigger significant market recovery, suggests Akshay Chinchalkar of Axis Securities.

This week, DIIs purchased equities worth Rs 11,035 crore, mitigating the impact of foreign divestments. In November, they have amassed a net buying of Rs 37,559 crore, underscoring a bullish sentiment. The divergence in investment strategies between foreign entities and domestic institutions highlights contrasting market perception amid global uncertainties.

Despite the relentless selling by Foreign Institutional Investors (FIIs), domestic participation remains buoyant. The total FII sell-off has reached Rs 113,858 crore in October alone, marking it the highest single-month selling ever observed. Nonetheless, FPIs continue to purchase in the primary markets, showing a cautious engagement in Indian equities.

(With inputs from agencies.)