FPIs resume sales in November; withdraw Rs 3,765 cr from shares

After a brief lull in October, foreign investors resumed their selling, pulling out a net Rs 3,765 crore from Indian equities in November, driven by global risk sentiment, volatility in global technology stocks and selective preference for primary markets over secondary markets.This dip in November came right after a net inflow of Rs 14,610 crore in October, a rebound that had broken a three-month streak of withdrawals — Rs 23,885 crore in September, Rs 34,990 crore in August and Rs 17,700 crore in July, according to deposit data.

The flow trend through November was shaped by a combination of global and domestic factors.On a global level, uncertainty surrounding the US Federal Reserve’s interest rate cut path, a strong US dollar and weak risk appetite in emerging markets kept foreign investors cautious. Ongoing geopolitical tensions and volatile crude oil prices further strengthened risk appetite, said Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India.

Domestically, this caution was compounded by periods of high valuations and weak industrial indicators, which dampened investor conviction despite India’s relatively stable macroeconomic backdrop, he added.

Reflecting this sentiment, Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, noted that November’s outflows were mainly driven by global risk aversion and volatility in technology stocks. IT services, consumer services and healthcare were among the sectors that saw the biggest impact. However, not all indicators point to an ongoing bearish trend. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, believes that there is still no clear evidence of a trend reversal in FPI flows. He noted that FPIs were buyers on some days and sellers on other days, an indication that flows may shift as conditions evolve.

The recent rally, with both Nifty and Sensex hitting fresh all-time highs on November 27 after a 14-month wait, along with improved corporate earnings in the second quarter and expectations of further growth in the third and fourth quarters, has improved market sentiment, he added.

Looking ahead, Angel One’s Khan said FPI activity in December is likely to depend on interest rate cut signals from the US Federal Reserve and progress on the India-US trade deal.

So far in 2025, FPIs have withdrawn more than Rs 1.43 lakh crore from Indian equities. Meanwhile, in the debt market, FPIs invested Rs 8,114 crore under the overall limit while withdrawing Rs 5,053 crore through the voluntary retention route during the same period. PTI