Record FII exodus shakes India’s stock markets even as domestic funds step up
Subscribe to enjoy similar stories. Foreign institutional investors (FIIs) have unloaded a record ₹1.1 trillion worth of Indian shares from the cash market this October, marking the heaviest monthly outflow yet and rattling investor sentiment.
The selloff, driven by factors ranging from the upcoming US presidential election to disappointing earnings, has plunged India’s benchmarks while domestic investors scramble to counterbalance the exodus. Read this | NSE cash volumes sink to six-month low ahead of Sebi’s F&O curbs This level of FII outflow eclipses even the pandemic-driven selling in March 2020, which saw ₹60,321 crore in cash market exits, according to NSDL data.
Notably, this figure excludes FII primary market activities, where they often remain net buyers. Including purchases in initial public offerings (IPOs) and other primary channels, the net outflow for October stands at ₹91,819 crore, still a staggering departure after four consecutive months of net buying totalling ₹1.24 trillion.
"A host of factors such as uncertainty ahead of the US presidential polls on 5 November , China stimulus-driven rally and Q2 earnings misses have led to the huge outflows," said Andrew Holland, chief executive, Avendus Capital Public Markets Alternate Strategies. This sustained selling pressure has sent the Nifty and Sensex down around 6% each in the month through 30 October, levels that could have been steeper if not for strong support from domestic institutional investors (DIIs).
More here | Stock market likely to continue its downtrend till US elections get over Domestic players, primarily mutual funds, injected ₹1.03 trillion, partially offsetting the FII withdrawals. Dhiraj Sachdev, CIO of Roha Venture, a family office fund,
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