Rs 26,565 crore in June, Rs 32,365 crore in July, Rs 7,320 crore in August and Rs 57,724 crore in September. This is not an ordinary figure. This money was invested by foreign portfolio investors in the Indian stock markets. If these four amounts are added, it will be approximately Rs 1.24 lakh crore. What happened to the foreign investors who were continuously investing money in the continuously overvalued Indian stock market that as soon as October came, they withdrew more than Rs 27 thousand crores in just four days?
Yes, this amount is also not small. In fact, in the last few years, investors investing money in emerging markets had expressed confidence in India because China's economy was sinking. Due to the circumstances that emerged after Covid, foreign investors were losing confidence in the Chinese market. In such a situation, the other option they had was India, on the basis of which foreign investors made a lot of money. Now China has made such a move that once again foreign investors have turned towards China.
In fact, the Chinese government has announced a package of $140 billion to boost the economy. Now its effect was that foreign investors took profits from the Indian stock market and invested their money in the Chinese stock market. Due to which last week there was a decline of 4.5 percent in the stock market. Even money from domestic investors could not stop this decline. Let us try to understand from the data that how much money have foreign investors withdrawn from the stock market in October?
Due to the increasing conflict between Israel and Iran, sharp rise in crude oil prices and better performance of Chinese markets, foreign portfolio investors (FPIs) have withdrawn Rs 27,142 crore from the Indian stock markets in the first three trading sessions of October. Earlier in September, FPI investment in the Indian stock market had reached a 9-month high of Rs 57,724 crore. After withdrawing Rs 34,252 crore from shares in April-May, FPIs have been buying continuously since June. Depository data shows that except January, April and May in 2024, FPIs have been net buyers in all other months.
According to the data, between October 1 and 4, FPIs have withdrawn a net Rs 27,142 crore from shares. The markets were closed on October 2 on the occasion of Gandhi Jayanti. Talking about the debt or bond market, during the period under review, FPIs have withdrawn Rs 900 crore through the general limit and invested Rs 190 crore through the voluntary retention route (VRR). So far this year, FPIs have invested Rs 73,468 crore in shares and Rs 1.09 lakh crore in the debt or bond market.
Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said that factors like geopolitical developments and the future direction of interest rates will further decide the direction of FPI investments in the Indian market. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that selling by FPIs has increased due to the better performance of Chinese stocks. The Hang Seng index has gained 26 per cent in the past month and is expected to continue rising as Chinese stocks are undervalued and the monetary and fiscal stimulus being implemented by the authorities there has helped the economy perform better. hopefully.
