Foreign portfolio investors (FPIs) have pulled out Rs 22,194 crore from Indian stock markets so far this month. FPIs remain sellers amid fears of weak quarterly results of companies, strengthening of the dollar and fear of intensification of the tariff war under the Donald Trump administration. Earlier in December 2024, FPI had invested Rs 15,446 crore in the Indian stock market. Foreign investors have reduced their investments in Indian stocks amid constraints on the global and domestic front.
According to new agency PTI, Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said, “Many factors are responsible for the withdrawal of foreign funds from Indian markets. These include the possibility of companies’ quarterly results being weak, the possibility of the tariff war intensifying under the Trump administration, slowness in the GDP growth rate, high inflation and uncertainty about the beginning of the phase of interest rate cuts in India.
Invested so far this month only on January 2
Apart from this, FPIs are also selling due to record low level of Indian rupee, rise in US bond yield and high valuation of Indian stock market. According to depository data, foreign portfolio investors have pulled out Rs 22,194 crore from stocks this month till January 10. FPIs have been net sellers in all trading sessions except January 2.
m-cap of 5 out of top 10 companies reduced by ₹1.85 lakh crore, HDFC Bank suffered the biggest loss
Continuous increase in dollar index
“The only major reason for the continued selling by FPIs is the sustained rise in the dollar index, which is now above 109,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services. The yield on 10-year bonds is above 4.6 percent, due to which investors are withdrawing money from emerging markets. Last year i.e. in 2024, FPI made a net investment of only Rs 427 crore in Indian shares. Whereas in 2023, he had invested a huge amount i.e. Rs 1.71 lakh crore in the Indian stock market.