FPIs Shift from Buyers to Sellers

Foreign portfolio investors (FPIs) switched their stance from net buyers to net sellers this week, offloading equities worth Rs 977 crore, according to data from the National Securities Depository Limited (NSDL). Initially, from December 16 to 20, FPIs purchased equities amounting to Rs 3,126 crore in the first two trading sessions. However, they reversed their trend in the subsequent three sessions, selling equities worth over Rs 4,103 crore.

Despite this week's selling, the overall FPI investment in December remains positive, with Rs 21,789 crore invested in Indian equities so far. This indicates continued confidence in India's economic growth potential. Financial experts attribute the selling pressure to international factors such as central bank interest rate concerns, geopolitical tensions, and profit-taking following recent market gains.

The week was characterized by a "risk off" sentiment in global markets, primarily due to the Federal Reserve. Although US markets recovered slightly on Friday, emerging markets (EMs) faced the impact of a strong US dollar and rising US bond yields, leading to FPI outflows. India, with the Rupee hitting an all-time low against the US dollar, faced these global headwinds, resulting in strong FPI selling. "A Santa Claus rally has been negated for now," said Ajay Bagga, a banking and market expert.

Earlier, FPIs sold equities worth Rs 21,612 crore in November, a reduction compared to the Rs 94,017 crore sold in October, according to NSDL data.