Record Rs 94,000 crore withdrawn by foreign investors in October

Foreign investors withdrew Rs 94,000 crore (approximately USD 11.2 billion) from Indian stock markets in October, the highest monthly outflow ever recorded, surpassing the previous withdrawal of Rs 61,973 crore in March 2020 during the pandemic. The primary reason is attributed to high domestic equity valuations and appealing Chinese stock prices and recent economic stimulus announced.
Earlier, FPIs have consistently bought equities since June, following a withdrawal of Rs 34,252 crore during April-May. Throughout 2024, FPIs remained net buyers, with exceptions in January, April and May, according to depositories data.
Himanshu Srivastava, associate director at Morningstar Investment Research India said that future foreign investment in Indian equities will be influenced by global factors, including geopolitical events, interest rate changes, Chinese economic performance and US Presidential election results.
Domestic factors such as inflation patterns, corporate performance and festive season demand impact will remain under FPI observation as they evaluate Indian market opportunities, he added.
Data indicates a net outflow of Rs 94,017 crore last month, with FPIs selling consistently throughout the month except for one day, reducing their total investment for 2024 to Rs 6,593 crore, triggering benchmark indices to decline approximately 8% from peak levels.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said that despite significant FPI selling in financial sectors, resilience persists due to fair valuations and absorption by DIIs and HNI investors.
Additionally, FPIs withdrew Rs 4,406 crore from debt general limits whilst investing Rs 100 crore in debt VRR during this period. Their total debt market investment for the year stands at Rs 1.06 lakh crore.