FII selling crosses ₹2 trillion in FY25, may cross FY22 record
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Subscribe to enjoy similar stories. Investors exiting India have net-sold over ₹2 trillion worth of shares this fiscal, setting the stage for what could be the worst year for foreign portfolio outflows on NSE's secondary market. As US bond yields rose and quarterly earnings disappointed amid lofty valuations, foreign institutional investors (FIIs) net-sold a record ₹1.17 trillion in the secondary market in NSE's cash segment in October.
This brings total outflows for the fiscal year till 31 October to ₹2.02 trillion. Going by November's overall cash market sales, it could cross FY22's record ₹2.8 trillion outflows by the end of the fiscal year. Market experts said that if rising US yields spark outflows from emerging markets (EMs) to the US, that will hit India to the extent of its weight in the MSCI Emerging Market Index.
As of 31 October, India's weight in the index was 18.84%, behind China's 27.38% and Taiwan's 19.05%. "While India's structural story is intact, in the run-up to and aftermath of the US presidential elections, dollar bond yields have risen, and the greenback has strengthened, resulting in EM outflows," said Nitin Jain, chief investment officer & chief executive officer, Kotak Mahindra Asset Management (Singapore). “Consequently, India, being part of the EM basket, has faced selling pressure." Jain believes the dust will settle once Donald Trump takes helm at the White House and greater clarity emerges on trade policies, especially tariffs.
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