FPI Outflows Hit Rs 53,337 Crore as Crude Stays Above $100

Foreign investors remain cautious on India as Brent crude consistently trades above $100 per barrel. An analyst said on Sunday that FPIs continue to lean toward selling and are steadily pulling money out of equities.

In October so far, net FPI selling has reached Rs 53,337 crore. At the same time, these investors have deployed Rs 5,281 crore in the Indian IPO market.

Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said total FPI selling through exchanges in the current year has amounted to Rs 3,69,164 crore.

Flows show FPIs have been net sellers for a 10th straight week. Still, the week ended October 23 saw a clear slowdown in selling, with FPIs buying on two sessions.

Several supportive factors contributed. The 10-year US bond yield eased from 5.36 per cent to around 5 per cent, the rupee firmed to 94.94 against the dollar, and large-cap valuations became less expensive.

Declining FII selling is a relief for markets. Yet high crude prices and widespread weakness across the broader market still carry the risk of a fresh decline.

Mid-cap and small-cap shares suffered sharp losses this week. The Nifty Midcap 100 shed 5.6 per cent and the Nifty Smallcap 100 dropped 7.3 per cent. The Nifty 50 posted a smaller fall of 2.35 per cent.

According to some market participants, forced liquidation of margin-funded long positions could be one reason for the broader market slump.

Large-cap stocks have been supported mainly by buying from domestic institutional investors, who hold substantial funds for investment.

According to analysts, costly crude oil remains a major constraint for the economy and the markets.