Foreign Portfolio Investments: Cautious Optimism Amid Global Shifts

In November, FPIs sold Rs 21,612 crore in Indian equities, a significant drop from October's Rs 94,017 crore. A positive shift occurred in late November, reflecting cautious optimism. Experts note future investments hinge on India's GDP and global trends, as the US market remains favored.

Foreign Portfolio Investors (FPIs) significantly reduced their equity sales in November, offloading Rs 21,612 crore compared to the Rs 94,017 crore sold in October, as reported by the National Securities Depository Limited (NSDL).

Despite overall outflows for the month, the period from November 25 to November 29 saw a reversal, with net FPI investments turning positive at Rs 4,921.5 crore. Market analysts attribute this shift to cautious optimism driven by changing global and domestic conditions. However, looming challenges persist.

Analysts have highlighted that future foreign investments will largely depend on a mix of factors, such as India's GDP, which recently fell short of expectations, and the prevailing investor preference for the US market. Notably, experts like Ajay Bagga have pointed out that while there was speculation of FPIs shifting towards net inflows, the shortened trading week due to US holidays saw renewed selling. The tight liquidity and slowing bank credit necessitate governmental and RBI action.

(With inputs from agencies.)