FPIs pull ₹34,843 crore from Indian equities in October

Foreign portfolio investors (FPIs) pulled out ₹34,843 crore from Indian equities during October, extending a period of significant capital outflows from domestic markets. The withdrawal represents the second straight month of heavy selling, following a ₹35,861 crore exit in September, as concerns about elevated crude oil prices, rising global interest rates and weakening corporate earnings outlooks weighed on investor sentiment.

However, foreign investors reversed course late in the month, turning net buyers and channelling approximately ₹6,300 crore into Indian equities between October 26-30. This marked a sharp contrast to the week ended October 23, which saw net outflows of nearly ₹2,700 crore, according to data from the Central Depository Services Ltd.

The data reveals a volatile investment climate, with FPI flows swinging considerably through the month. After investing ₹20,200 crore in July and ₹29,631 crore in August, the recent selling spree has taken a toll on foreign investor sentiment toward Indian markets. Year-to-date FPI outflows from equities have now reached ₹2.95 lakh crore.

Market analysts cautioned against reading too much into the late-month rally in FPI inflows. While the reversal signals a possible shift in near-term sentiment and suggests some stabilization, a single week of buying does not necessarily indicate a sustained recovery in foreign investment flows to Indian equities. Observers will be closely watching November flows for clearer signals on the direction of FPI sentiment heading into year-end.