FPI has pulled out ₹ 64,156 crore from the Indian equities market to date in January 2025 owing to the Rupee depreciation, US bond yields, and overall weak earnings forecast, as reported by PTI.
The selling shows a reversal in investor sentiments since December last year, When investors had pumped in ₹15,446 crore in Indian equities throughout the month –as per data with the depositories, added the report.
Global, Domestic Headwinds Cause Shift
The change in feeling is happening while facing global and local challenges, as the report highlighted.
“The constant decline in the Indian rupee is putting too much pressure on the foreign investors, which is ultimately leading them to withdraw the money from Indian equity markets,” Himanshu Srivastava, Associate Director – Manager Research, Morningstar Investment Advisers India, was quoted as saying by PTI. Besides that, higher valuation of Indian equities, although there has been some recent correction, expectations of a rather soft earnings season, and macroeconomic concerns are keeping investors on edge, he said.
Also, due to the unpredictable actions of the president, the investors have been forced to approach various forms of investment, like the PPF, with a higher level of caution than was previously the case, he said.
What Does The Data Show?
As per the data, FPIs sold shares of ₹64,156 crore in Indian equities till January 24 of this month. FPIs have been selling on all the trading days this month, barring January 2.
Therefore, FII selling has been led by the unabated appreciation of the dollar and the increase in the US bond yields. The selling is likely to continue so long as the dollar index stays above 108 and the 10-year US bond yield stays above 4.5 percent, according to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.