Foreign outflows of $3.1 bln from Indian financials drive record monthly sales in October, data shows
Foreign portfolio investors (FPIs) pulled out about $3.1 billion from Indian financial stocks in October, the second-highest amount ever from the sector and accounting for 30% of the record overall withdrawal for the month, data showed on Thursday.
The 260.42 billion-rupee selloff in financials — the heaviest weighted index on the benchmark NSE Nifty 50 — contributed to the record monthly outflows of $11.2 billion.
This triggered a 6% drop in the Nifty 50 and BSE Sensex, their worst monthly decline since March 2020.
A slowdown in loan growth, driven by the Reserve Bank of India's (RBI) clampdown on «exuberance» in retail lending and moderation in the net interest margins of several banks in the September quarter resulted in FPI selling in the sector, according to analysts.
«We expect a re-balancing between India and China from foreign investors to continue in the short term,» said Vineet Agrawal, co-founder of fixed income investment platform Jiraaf.
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