November 29, 2024
New Delhi, India
FPIs End Three-Day Buying Streak with Heavy Sell-Off
Foreign Portfolio Investors (FPIs) on Thursday abruptly reversed their buying trend, offloading ₹11,756 crore worth of Indian equities. The sell-off exceeded the combined inflows from the previous three trading sessions and marked one of the largest single-day outflows of 2024. This sharp reversal weighed heavily on the stock markets, causing the Sensex to tumble 1,190 points and the Nifty to shed 360 points, marking their steepest decline this month.
Global and Domestic Factors Fuel Selling Pressure
The heavy outflows came amid renewed fears of a delayed US Federal Reserve rate cut, persistent geopolitical tensions, and weak performance in key sectors such as IT and banking. Globally, investor sentiment was dampened by reports of Israel breaking a ceasefire with a Hezbollah facility strike and Russia targeting Ukraine’s energy infrastructure. Domestically, concerns about the Indian economy slowing to a six-quarter low in Q2 FY25 and weaker-than-expected corporate earnings further eroded confidence.
Rupee Hits Record Low Amid Market Turmoil
Adding to the volatility, the Indian rupee slumped to a historic low of 84.45 against the US dollar on Thursday, reflecting the ripple effects of heavy FPI selling and global uncertainties.
DIIs Step In, But Concerns Persist
While Domestic Institutional Investors (DIIs) purchased ₹8,718 crore worth of equities on the same day, their buying could only partially offset the bearish sentiment. For November, DII net purchases now stand at ₹38,760 crore, providing some stability amid relentless FPI outflows, which have reached ₹41,355 crore for the month.
Outlook Remains Cautious
Analysts warn that the fragile investor sentiment is unlikely to stabilize soon. The “Sell India, Buy China” trend, coupled with rising geopolitical risks and concerns about India’s economic growth, has kept FPIs wary. While short-term recovery may hinge on clarity regarding global interest rates, sustained inflows will depend on broader economic stability.
The focus now shifts to December, with hopes that easing global uncertainties and improved domestic conditions may draw back foreign investments into Indian equities.
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