Foreign Portfolio Investors Shift Stance: A November Sell-Off in Indian Markets

Foreign portfolio investors (FPIs) became net sellers in Indian markets for the second consecutive month as of November. Despite significant selling, domestic institutional investors mitigated potential impacts. FPIs had been consistent buyers in the previous four months, contributing to a bullish market. The trend now reflects geopolitical uncertainties and market valuation dynamics.

Foreign portfolio investors (FPIs) have turned net sellers in the Indian stock market for the second consecutive month as of November. This marks a shift from their net buying stance that persisted for four months through September, according to data from the National Securities Depository Limited.

In an unprecedented move, FPIs sold stocks worth Rs 21,612 crore in November and Rs 94,017 crore in October—recording the highest-ever monthly sell-off in October. Chief Investment Strategist V K Vijayakumar of Geojit Financial Services stated that consistent buying from FPIs might only resume after a market correction makes valuations more attractive.

The notable FPI sell-off, driven by factors such as geopolitical tensions and China's economic measures, led to a temporary slump with the Sensex falling to nearly 6,000 points below its peak. Nevertheless, domestic institutional investors stepped in as significant net buyers, cushioning the potential impact on stock indices and stabilizing market positions.

(With inputs from agencies.)