FPIs offload ₹424 crore in Indian equities as outflows sharply decline in February: Here's why

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₹26,168 crore so far in 2024. FPIs have sold ₹424 crore worth of Indian equities and the total inflow stands at ₹18,633 crore as of February 23, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL) data. "An interesting feature of the FPI trend recently is the decline in FPI equity outflows despite the rising bond yields in the US.

Normally when the US 10-year yield rises above 4.15 per cent, the FPIs sell heavily. But this is not happening now,'' said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Since the DIIs, HNIs and retail investors are the dominant players now and their sustained buying is pushing the market to newer records, FPIs have taken a backseat. In February through 23rd FPIs had net sold equity only for ₹423 crores, sharply down from the January level. FPIs turned massive sellers in January 2024 snapping their buying streak as investments saw a sharp uptick in December 2023 after they reversed their three-month selling streak in November 2023.

However, inflow intensified in December on strong global cues after the US Federal Reserve signalled the end of its tightening cycle and raised expectations of a rate cut in March 2024. This led to a crash in US bond yields and triggered foreign fund inflows into emerging markets like India. For the entire calendar year 2023, FPIs bought ₹1.71 lakh crore in Indian equities and the total inflow stands at ₹2.37 lakh crore taking into account debt, hybrid, debt-VRR, and equities, according to NSDL data.