Foreign portfolio investors (FPIs) have continued to press the sell-button in Indian equities, offloading a net ₹4,873 crore during the first half of November. The sustained outflow highlights rising caution among overseas investors as local market conditions tighten.
This latest wave of selling comes atop earlier modest outflows and reflects a broader concern around domestic valuations, global liquidity, and India’s near-term growth outlook. Analysts point to three key factors:
- Valuation pressure: With equity markets near highs and many stocks trading at stretched multiples, FPIs are increasingly wary of downside risk.
- External headwinds: Slowing global growth, rising interest rates abroad, and possible changes in US monetary policy are prompting risk-off moves from foreign investors.
- Domestic triggers: The Indian equity market is facing structural issues like weak mid-cap performance, liquidity constraints, and event-specific worries that may be magnifying caution.
While the magnitude of the outflow is significant, it should be viewed in context: India continues to attract long-term FPI interest and domestic liquidity remains strong. The key question now is whether foreign selling accelerates or stabilises in the coming weeks.
For domestic investors and market watchers, this means two things: First, falling FPI support may increase volatility and limit upside in the near term. Second, a sustained dip could create buying opportunities for well-positioned stocks if domestic flows pick up the slack.
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