Foreign Investors Withdraw Rs 20,024 Crore from Indian Markets
This week, foreign institutional investors (FIIs) have withdrawn a significant Rs 20,024 crore from Indian equities, causing a 2.5% drop in major stock indices, Nifty and Sensex. According to the National Stock Exchange (NSE), October has seen one of the largest selling sprees by FIIs in recent years. From October 21 to October 25, FIIs sold equities worth Rs 20,024 crore, contributing to a total net selling of over Rs 1,00,149 crore this month. This surpasses the selling pressure experienced during the pandemic and the 2008 financial crisis.
As a result, the cumulative net FII investments in India for 2024 have decreased to Rs 14,820 crore. Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that FIIs have become net cash sellers due to weaker-than-expected Q2FY25 earnings and ongoing weak market commentary. Foreign investors are shifting their funds to other growing economies like Japan and China.
Despite the heavy selling, domestic investors have shown resilience, helping to cushion the impact on key indices. Nifty 50 and Sensex are only down by about 7% from their 52-week highs, thanks to domestic investors infusing Rs 97,090 crore into equities in October. The trend of FII outflows will be closely monitored as Indian markets enter the last quarter of the year.
Doubts Revealed
Foreign Investors -: Foreign investors are people or companies from other countries who invest money in India. They buy shares in Indian companies to make a profit.
Rs 20,024 Crore -: Rs 20,024 crore is a large amount of money. In India, a crore is equal to 10 million, so this is 200,240 million rupees.
Nifty and Sensex -: Nifty and Sensex are two important stock market indices in India. They show how well the stock market is doing by tracking the performance of top companies.
FII -: FII stands for Foreign Institutional Investors. These are large organizations from other countries that invest in Indian financial markets.
Equities -: Equities are shares of companies that people can buy and sell in the stock market. Owning equities means you own a part of the company.
Domestic Investors -: Domestic investors are people or companies from India who invest money in Indian markets. They help balance the market when foreign investors withdraw their money.
Earnings -: Earnings refer to the profits that companies make. If a company’s earnings are weak, it means they are not making as much money as expected.
Financial Crises -: Financial crises are times when the economy is in trouble, and many people and businesses lose money. It can cause stock markets to fall.