In January 2025, foreign portfolio investors (FPI) continued to withdraw from the Indian stock markets, resulting in net outings of 78,027 breaks of rupees. Indian shares are currently experiencing a four -month downward trend, marking their worst performance in 23 years. This drop can be awarded to factors such as mediocre profits, foreign capital outings and economic uncertainty, which have all attenuated previous market records.
The recent increase in the US dollar and the increase in American bond yields, after the re -election of Donald Trump, made American assets more attractive to investors. Consequently, capital has moved away from Indian actions. While the FPIs were net buyers of RS 15,448 crosses in December 2024, they have since sold Rs 94,017 crosses in October and Rs 21,612 crore in November, contributing more to the flow of capital of the Indian markets.
Noting the sale, Deepak Shenoy, CEO of the asset management company CapitalMind Financial Services, said that in February so far, the FPIs have sold equity of 2,600 roots, but bought RS 13 400 Brove debt. He added that the massive purchase of debt takes place.
“Until now, in February, the FPIs have sold 2600 CR. Equity – bought 13,400 cr. Debt. The data of yesterday is not included, so just the first two days of negotiation (Saturday, the FPI N ‘have not exchanged).
What about FPI outings?
The strengthening of the US dollar and the increase in American bond yields after Donald Trump’s return to the presidency led to the transition from the capital of Indian shares to more attractive American assets.
Despite significant sales in January, foreign portfolio investors (FPI) reversed this trend in December 2024, becoming net buyers of 15,448 crore. On the other hand, the FPIs had unloaded RS 94 017 Brove and RS 21 612 crore in October and November, respectively.
The stronger dollar, high of American yields, tariff concerns, slow internal economic growth and high assessments of shares will only extend more IP, said Sanjeev Hota, vice-president and head of research management Heritage at Mirae Asset Sharekhan.
According to VK Vijayakumar, chief investment strategist at Geojit Financial Services, the main reason for the recent withdrawal of the FPI is the impressive performance of the American economy and the profits of companies, which have exceeded the recent trajectory of growth and profits from India.
Vijayakumar noted that although the budget had a positive impact on feeling, the uncertainty caused by the pricing policies of President Trump disrupted the world economic landscape.
“The budget has improved the feeling, and with the growth and resumption of the expected profits, the trend could be reversed. However, Trump’s pricing policies have injected uncertainty into the world economic landscape. »»
FPI VS DII
While foreign portfolio investors (FPI) continue to withdraw funds from Indian shares without any signing signs, national institutions have intervened to absorb sales pressure by injecting billions on the market. They bought actions totaling 86,591 sterling books, almost balancing the sale of the FPI and preventing a significant slowdown in the market.
The NIFTY 50 and Sensex saw drops of more than 0.5% at the end of January, marking the fourth consecutive month of losses for the indices. This is the first case in the last 23 years when key indices have experienced four consecutive months in the red.
Middle and small capitalization stocks were faced with substantial declines during the month, the Nifty Small Cap 100 index fell by 10%, marking the greatest monthly drop since February 2022. In addition, the Nifty Midcap index 100 also had a drop of 6.10%.
FPI and Govt bonds
According to the Economic Survey 2025 published on January 31, FPIs have invested RS 62,431 has been believing in state bonds since their inclusion in the JP Morgan index. The survey also highlighted an increase in the activity of the FPI debt segment, with cumulative flows amounting to Rs 1.1 Lakh crore from October 2023 to June 2024, following the advertisement The inclusion of Indian Government’s Obligations (IGB) in the JP Morgan index in October 2023.
On June 28, JP Morgan added 29 government titles under the fully accessible road (FAR) in its emerging market index. India currently has a weight of 1% in the index, with progressive increases scheduled each month until March 2025. FAR allows non-residents to invest in government titles specified in India without any limit of investment.
During fiscal year 25, inclusion led to a net influx of more than $ 3 billion in distant Indian bonds, with assets under the care of $ 28 billion on December 15, 2024, according to the investigation document Eco.
