FPIs remain net sellers in equities in October, debt market sees major inflows; will the trend continue?

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₹24,548 crore from Indian equities, on the back of spiking US Treasury yields and a rise in crude oil prices. FPIs turned net sellers in September, selling equities worth ₹14,768 crore. This shift occurred following a period of sustained buying that commenced in March and continued till August.

In this period, FPIs infused ₹1,68,179 crore into Indian equities, as per the depositories data. Meanwhile, on the back of continuous FPI outflows, the ongoing Israel-Palestine war, surging US bond yields, and a strengthening US dollar, the Indian market shed 2.8 percent in October, marking the biggest monthly fall in CY23. From its all-time high of 20,222 points, the index is currently down by 6.04 percent.

Before this, the Nifty was up 2 percent in September after a 2.5 percent decline in August. It jumped as much as 2.9 percent in July, in the green for the fifth straight month, after a 3.5 percent rise in June, a 2.6 percent jump in May, a 4 percent rally in April, and a 0.3 percent gain in March. However, it was in the red in the first 2 months of the year, down over 2 percent each.

Before turning net sellers in September, FPIs infused ₹12,262 crore in August. Meanwhile, the net inflow was at ₹46,618 crore in July, ₹47,148 crore in June, and ₹43,838 crore in May. Then, ₹11,631 crore was infused in Indian equities in April and ₹7,935 crore in March.

However, in the first 2 months of the current calendar year, FPI investments were in the red. They sold equities worth ₹28,852 crore in January and ₹5,294 crore in February. Overall, in 2023 YTD, the FPIs have made inflows worth ₹95,538 crore.