Foreign Investors Pull Out Rs 27,142 Crore from Indian Stock Market in October
The Indian stock market is facing significant pressure as Foreign Portfolio Investors (FPIs) have been selling large amounts of equities since the start of October. In the first three trading days alone, FPIs sold equities worth Rs 27,142 crore, according to the National Securities Depository Limited (NSDL). The largest sell-off occurred on October 4, with FPIs offloading Rs 15,506 crore, indicating a decline in investor confidence.
Experts attribute this sell-off to a change in foreign investor strategy. Many FPIs are shifting their investments from Indian stocks to other Asian markets like China and Hong Kong, where they anticipate better returns. This shift has made FPIs net sellers in Indian equities, contributing to the market downturn.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, explained, “The selling has been mainly triggered by the outperformance of Chinese stocks. The Hang Seng index rose by 26% in the last month, and this bullish trend is expected to continue due to low valuations and economic stimulus in China.” He added that if this momentum continues, FPIs might keep selling in India due to high valuations.
Market analysts also caution that escalating tensions in the Middle East, especially potential damage to oil fields, could lead to further global market volatility. Investors are advised to remain cautious as these global events unfold.
Doubts Revealed
Foreign Investors -: Foreign investors are people or companies from other countries who invest money in India’s stock market to earn profits.
Rs 27,142 Crore -: Rs 27,142 crore is a large amount of money, where ‘Rs’ stands for Indian Rupees, and ‘crore’ is a term used in India to denote ten million. So, Rs 27,142 crore is 271.42 billion rupees.
Indian Stock Market -: The Indian stock market is a place where people buy and sell shares of companies in India. It’s like a big marketplace for trading company ownership.
Foreign Portfolio Investors (FPIs) -: FPIs are investors from other countries who invest in financial assets like stocks and bonds in India, hoping to earn returns.
Equities -: Equities are shares of a company that represent ownership. When you buy equities, you own a part of that company.
Geojit Financial Services -: Geojit Financial Services is a company in India that provides financial advice and services to help people invest their money wisely.
Middle East tensions -: Middle East tensions refer to conflicts or disagreements in the Middle East region, which can affect global markets and cause uncertainty.
Market volatility -: Market volatility means that the prices of stocks can change quickly and unpredictably, making it risky for investors.