FPI outflows resume in November: Rs 3,765 crore offloaded; global risk-off cues and high domestic valuations hit sentiment
This November decline followed October’s net inflow of Rs 14,610 crore, which had interrupted three consecutive months of outflows — Rs 23,885 crore in September, Rs 34,990 crore in August, and Rs 17,700 crore in July, as per depository data.November’s flow patterns were influenced by both global and domestic factors.Globally, uncertainty regarding US Federal Reserve’s rate-cut timeline, strong US dollar performance, and diminished risk appetite in emerging markets created investor caution.
Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, noted that ongoing geopolitical tensions and fluctuating crude prices heightened risk-averse behaviour.In the domestic context, high valuations in certain sectors and weak industrial indicators dampened investor confidence, despite India’s stable economic fundamentals, he further explained.Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, observed that November’s outflows were mainly attributed to global risk aversion and technology sector volatility.
The sectors most affected included IT services, consumer services, and healthcare.Nevertheless, some indicators suggest the bearish trend may not persist.V K Vijayakumar, Chief Investment Strategist at Geojit Investments, indicates no definitive trend reversal in FPI flows.
He observed alternating buying and selling patterns, suggesting flow directions could change as circumstances develop, as quoted by news agency PTI.Market sentiment improved following the November 27 rally, where both Nifty and Sensex achieved new highs after fourteen months, supported by stronger Q2 corporate earnings and positive Q3 and Q4 projections, he noted.For December, Angel One’s Khan suggests FPI activity will likely be influenced by US Federal Reserve’s rate-cut indications and developments in the India-US trade agreement.In 2025, FPIs have withdrawn over Rs 1.43 lakh crore from Indian equities.
Regarding debt markets, FPIs invested Rs 8,114 crore under general limits while withdrawing Rs 5,053 crore through the voluntary retention route during this period.
