The FPIs had offloaded a staggering Rs 1,13,858 crore in October.
While FPIs continued their exit from the secondary market, selling Rs 32,351 crore through exchanges, they maintained their confidence in the primary market with investments of Rs 9,931 crore.
Adding to the concern, FPIs have also turned cautious on Indian debt markets, with outflows reaching Rs 4,717 crores in the first fortnight of November.
“The relentless FPI selling has been triggered by the cumulative impact of three factors: one, the high valuations in India; two, concerns regarding the earnings downgrade; and three, the Trump trade,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The persistent FPI outflows could pose challenges for Indian markets in the near term, as foreign investors continue to realign their portfolios based on global and domestic factors.The Trump victory has impacted both the equity and bond markets in the US. Equities have boomed on expectations of the positive impact of the promised corporate tax cut by Trump and his pro-business policies.Meanwhile, the bond market has been impacted by the concerns of the potentially rising fiscal deficit under Trump.
“The sharp upmove of the 10-year US bond yield to 4.42% has negative implications for emerging markets. This is reflected in the FPI selling in the debt market, too,” added Vijayakumar.
Also read: Investors not inclined to ‘sell India buy China’ but to ‘sell India buy USA’: Samir Arora
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