FPIs pull out almost ₹35,000cr from Indian equities this month
What's the story
Foreign Portfolio Investors (FPIs) have pulled out a massive ₹34,993 crore from the Indian equity market in August. This is the biggest sell-off in six months and almost double the ₹17,741 crore outflow recorded last month. The withdrawal was triggered by a combination of global and domestic factors, including US tariffs on Indian exports and high domestic valuations.
Market impact
Largest sell-off since February
The recent withdrawal is the largest since February when FPIs sold Indian equities worth ₹34,574 crore. Himanshu Srivastava, Associate Director at Morningstar Investment, said that the announcement of steep US tariffs on Indian exports has dented sentiment significantly. He added that corporate earnings for certain sectors in Q2 fell short of expectations, further dampening investor appetite.
Valuation concerns
FPIs continue to buy in primary market
Commenting on the situation, V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said that high valuations in India compared to other markets are prompting FPIs to move their money elsewhere. Despite this massive sell-off through exchanges, FPIs have continued buying equity worth ₹40,305 crore through the primary market where IPO valuations are fair.