Foreign Institutional Investor (FII) outflows from Indian markets saw a significant reduction in November 2024, following a steep market correction in October. The Nifty 50 index had experienced a sharp 6 percent decline in October, closing 8 percent lower than its all-time highs. According to a report by JM Financials, this slowdown in FII selling indicates a stabilization in Indian markets.
November proved to be a calmer month for trading, with the benchmark index largely remaining flat. FII activity reflected this stabilization, as the intense selling pressure of October subsided significantly.
FII outflows dropped to Rs 182 billion (USD 2.2 billion) in November, a stark decline from Rs 919 billion (USD 10.9 billion) in October. The month was marked by a significant shift in investor sentiment, with a “tale of two halves.” During the first half of November, FIIs remained net sellers, with outflows of Rs 195 billion (USD 2.3 billion), but by the second half, they turned net buyers, bringing in Rs 13 billion (USD 159 million).
This shift was reinforced in the last seven days of the month, with FIIs recording net inflows of Rs 52.6 billion (USD 619 million).
Sector-wise, FII flows exhibited notable variations. The Oil and Gas sector saw the largest outflows for the second consecutive month, at USD 1.6 billion, followed by the Auto sector with USD 884 million in outflows. Telecom (USD 601 million) and FMCG (USD 167 million) also faced significant selling activity.
In contrast, sectors like Information Technology (IT), Banking, Financial Services, and Insurance (BFSI), and Realty attracted considerable inflows. IT led with inflows of USD 653 million, followed by BFSI at USD 296 million and Realty at USD 244 million. These inflows highlight investor interest in sectors perceived to offer resilience or growth potential.
FII shareholding in Indian equities inched up slightly to 16.1 percent in November 2024, from 16 percent in October, which marked the lowest level in 12 years. However, this figure remains lower year-on-year compared to 16.8 percent in November 2023. FII Equity Assets under Custody (AUC) also showed an improvement, rising to Rs 71.9 trillion at the end of November from Rs 71.1 trillion in October, signaling renewed investor confidence in the Indian market.
(Inputs from ANI)
