Home / Markets / Stock Markets /  FPIs stay as net sellers so far in Oct, outflow from equities at 5,992 cr. What's ahead

Foreign portfolio investors (FPI) remained as net sellers so far in the current month with an outflow in equities of around 5,992 crore as of October 21, 2022. Despite the overall October month witnessing money going out from equities by FPIs, in the past few days, there has been a breather in selling pressure as markets condition stabilises with a focus now on major Q2 earnings. So far in 2022, market performance has been sustained due to stellar buying in DIIs and retail investors that offset the shocks of FPIs' selloff. In the near term, FPIs is likely to relax in their selling bias.

As per the NSDL data, FPIs outflow as of October 21, 2022, stood at 5,992 crore from the equities market. The outflow stood at 7,624 crore in September month.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "As per NSDL data, in October FPIs sold equity worth 5992 crores till 21 st. But during the last few days, FPIs had slowed down their sales substantially."

In other market instruments, FPIs sold about 1,950 crore in debt market, and 254 crore in the hybrid market. However, in debt-VRR, FPIs bought 1,010 crore so far in the current month.

Overall, in the Indian market, the outflow is around 7,186 crore (including equities, debt, debt-VRR, and hybrid).

According to the Geojit expert, FPIs have been sellers in financials, FMCG, and IT in October.

Year-to-date, FPIs pulled out about 1,74,781 crore from the equities --- accounting for 97.13% of the overall selloff of 1,79,939 crore in the overall market.

Vijayakumar added, "A major trend in the market is that sustained buying by DIIs and retail investors has been overwhelming FPI selling. If FPIs want to buy the stocks that they sold they will have to pay a much higher price. This realisation is slowing down their selling even in the negative macro construct where US bond yields are rising and rupee is depreciating."

However, he added, "the Q2 Results of these segments have been good with financials, particularly leading banks, beating expectations."

Going forward, Geojit expert said, "FPIs are unlikely to sell heavily in the near term. But they will turn to sustained buyers only when the dollar starts declining. This in turn, will depend on the trajectory of US inflation and the Fed’s monetary stance."

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