Foreign Portfolio Investors Continue Selling in Indian Markets

Foreign Portfolio Investors (FPIs) have been active sellers in the Indian equity markets, with recent reports indicating that they sold stocks worth Rs 3,318.1 crore on Friday. This marks the eleventh consecutive session in which FPIs have maintained a net selling position.

Domestic Institutional Investors Show Resilience

In contrast, domestic institutional investors (DIIs) have displayed a strong buying trend, having purchased stocks worth Rs 2,572.9 crore over the past 22 sessions. This trend signifies their confidence in the market even amidst significant selling pressure from foreign investors.

FPI Trends in January

For January alone, FPIs have offloaded equity worth a staggering Rs 44,396 crore, reflecting a notable shift in their investment strategy. The data from the National Securities Depository Ltd (NSDL) highlights that FPIs sold stakes worth Rs 4,416.02 crore just on January 16. This continuous outflow is indicative of broader market sentiments and perhaps global economic concerns.

Market Performance Overview

The ongoing selling by FPIs has contributed to a decline in the markets, with both the NSE Nifty 50 and the BSE Sensex experiencing their second consecutive week of losses. Among the laggards in the market this week were major IT companies such as HCL Technologies Ltd. and Infosys Ltd., which faced steep declines, with the Nifty IT sector dropping nearly by 6%. Notably, despite some stocks facing challenges, companies like Hindalco Industries Ltd. and NTPC Ltd. emerged as the top gainers.

Long-Term FPI Selling Pattern

Since October 2024, FPIs have primarily been net sellers, shedding stocks worth Rs 7,292.3 crore. In stark contrast, DIIs have been net buyers, investing Rs 5.32 lakh crore during the same period, according to provisional data from the NSE. The previous month, December 2024, also saw significant FPI selling, with reported outflows of Rs 7,292.3 crore as DIIs reported purchases totaling Rs 34,194.7 crore.

Future Market Outlook

The recent trends in the market set a cautious tone ahead of the third-quarter results from major companies such as Tech Mahindra Ltd. and Wipro Ltd.. Investors will be closely monitoring these earnings reports for insights into corporate performance and future market directions.

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