After two months of selling, FPIs bet big on India after Diwali

• FPIs have turned buyers in November and are ₹107.81 crore in the green post Diwali.
• FPIs had offloaded equities worth ₹5,806 crore before Diwali.
• There was an investment of ₹5,328.1 crore a day after Diwali.

The Diwali cheer has continued on Dalal Street with the foreign portfolio investors (FPIs) having turned net buyers in November after making huge purchases after Diwali that fell on November 12, 2023.

The FPIs had been net sellers in the first half of the month, having offloaded equities worth ₹1,416 crore till November 15. However, the trend has changed after FPIs invested a huge amount of ₹5,328 crore in a single day on November 13, followed by ₹1,523 crore on November 16.

The month of October had recorded the highest sell-off in equities by FPIs in the financial year at ₹24,548 crore. If we look at 2023, this was the second highest sell-off after January 2023 which recorded FPIs offloading equities worth ₹28,852 crore.

FPIs had also offloaded equities worth ₹14,768 crore in September 2023, ending a six-month streak of inflows in 2023. May 2023 had recorded the highest inflows in FY24 at ₹43,838 crore.



Source: NSDL, *November data as on November 16.

While there could be a lot of reasons for FPIs offloading, the sell-off had increased after the yield on the 10-year US Treasuries topped 5% for the first time since 2007. In addition to this, the geopolitical conflict in the middle east has also fueled the sell-off.

The banking and financial services and the information technology (IT) sector recorded a substantial sell-off.

Despite the sell-off in the last three months, the net investment in FY24 has been positive. FPIs have invested ₹1,16,586 crore in the country so far.

Analysts expect the sell-off to ease down as the yields soften and the Fed goes on hold for a longer period.

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