Foreign investors sold Rs 20,024 crore from Indian equities this week; Nifty, Sensex down 2.5%

Foreign institutional investors (FIIs) have withdrawn a staggering Rs 20,024 crore from Indian equities this week, leading to a 2.5 per cent decline in the Nifty and Sensex indices. Data from the National Stock Exchange ( NSE ) indicates that this week’s selling is part of a broader trend, with October witnessing one of the largest sell-offs in recent years.

Between October 21 and October 25, FIIs have been aggressively reducing their exposure to Indian markets, contributing to a cumulative net selling of over Rs 1,00,149 crore for the month. This level of outflow surpasses the selling pressure experienced during both the pandemic and the 2008 global financial crisis. As a result, cumulative net FII investments in India for 2024 have fallen to just Rs 14,820 crore.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted, “FIIs turned net cash sellers to the tune of Rs 1,00,149 crore to date in October 2024. Market sentiment continues to be weighed down by weaker-than-expected Q2 FY25 earnings reports and ongoing cautious commentary. FPI flows are expected to remain volatile.”

The recent shift in investment strategies has seen foreign investors reallocating funds from Indian markets to other economies, particularly Japan and China, which have shown promising signs of growth and are increasingly perceived as attractive investment options.

This week’s selling followed a significant outflow from October 14 to October 18, during which investors sold Indian equities worth Rs 19,065.79 crore. Earlier in the month, they offloaded Rs 31,568.03 crore, indicating a consistent trend of exiting the Indian market.

Despite the large-scale selling, domestic investors have displayed resilience, helping to cushion the impact on key indices. The Nifty 50 and Sensex are currently down only about 7 per cent from their 52-week highs, reflecting strong support from local investors, who have infused equities worth Rs 97,090 crore in October to counteract the FII sell-off.

As both global and domestic factors continue to influence market sentiment, the ongoing trend of FII outflows will be closely monitored as Indian markets approach the final quarter of the year.

(With ANI inputs.)