New Delhi, September 21 (TNA) The relief triggered by foreign investors returning to the Indian stock market appears to have been short-lived. After making strong purchases in July and August, foreign portfolio investors (FPIs) have once again turned sellers in September.
According to data available up to September 19, FPIs sold Indian equities worth ₹23,676 crore through stock exchanges during the month. The sharp reversal has renewed market participants' concerns about the sustainability of the recent recovery in foreign flows.
Foreign investors had infused ₹11,045 crore into Indian equities in July and ₹10,231 crore in August. The two consecutive months of buying had raised hopes that heavy selling seen earlier in the year was finally easing and that investor sentiment was improving.
However, September has brought renewed selling pressure. Analysts have attributed the reversal to several global and domestic factors, including elevated crude oil prices, rising US bond yields, geopolitical uncertainty and concerns over the rupee and global liquidity.
The latest outflows add to the pressure on Indian equities, particularly at a time when foreign investors are reassessing their exposure to emerging markets. The strengthening dollar and higher borrowing costs in the United States can make Indian assets relatively less attractive to global investors.
Despite the heavy selling in the secondary market, foreign participation in the primary market has remained positive. FPIs invested ₹2,703 crore in India’s primary market during September, according to data cited in market reports.
Market experts will now closely monitor crude prices, US monetary-policy signals, bond yields and currency movements to assess whether the September selling is temporary or marks the beginning of another prolonged phase of foreign fund outflows.