FPIs dump ₹14,323cr in 4 days, equity markets hit hardest
What's the story
Foreign portfolio investors (FPIs) have continued their selling spree in Indian markets, pulling out a whopping ₹14,323.37 crore over four trading sessions from August 25-29. The trend was led by a massive single-day outflow of ₹6,483.09 crore on August 28 and another ₹6,132.42 crore next day. The equity markets were particularly hit hard by this foreign selling spree, with FPIs registering net outflows of ₹13,634 crore in equity investments during this period, data from National Securities Depository Limited (NSDL) shows.
Market dynamics
Debt segment shows mixed trend
The debt segment showed a mixed trend during the week. The Debt-General Limit category saw net inflows of ₹721.05 crore across four days, while the Debt-FAR (Foreign Access Route) category witnessed outflows of ₹1,442.08 crore. The Indian rupee (INR) also weakened against the dollar during this period, further reflecting the risk-off sentiment in Indian markets.
Expert opinions
Sustained selling attributed to several headwinds
Market experts have attributed the sustained selling to several headwinds. "Indian equities continued to trade at premium valuations compared with other emerging markets, making them vulnerable to profit-taking and reallocation of capital toward relatively cheaper markets," said Himanshu Srivastava from Morningstar Investment. He also noted that the announcement of steep US tariffs on Indian exports dented sentiment significantly, raising concerns over India's trade competitiveness and growth outlook.
Market resilience
Primary market investments provide some relief
Despite the massive outflows through stock exchange transactions, primary market investments provided some relief with net inflows of ₹546.82 crore during the four trading days. This shows that despite the challenges posed by global uncertainty and domestic valuation concerns, there are still pockets of resilience in the Indian markets.