FPIs Exit ₹1 Lakh Crore in Q3, Select Sectors Defy the Trend
The September quarter saw foreign portfolio investors (FPIs) withdraw a massive ₹1.12 lakh crore ($14.5 billion) from Indian equities—the highest quarterly outflow since March 2020. Despite this sell-off, select sectors and stocks posted strong gains, driven by domestic demand and government spending.
Why Did FPIs Pull Out? Global & Domestic Triggers
The FPI exodus was fueled by multiple macroeconomic factors:
– Rising US Treasury Yields (above 4.5%) made safer assets more attractive.
– Strong Dollar Index reduced appetite for emerging markets.
– Premium Valuations in Indian equities led to profit booking.
– Global Risk-Off Mood due to China’s slowdown and geopolitical tensions.
Hardest-Hit Sectors: Banking & IT
FPIs heavily offloaded financial and IT stocks, including:
– HDFC Bank, ICICI Bank, Kotak Mahindra Bank (dragging Nifty Bank down).
– TCS, Infosys (pressured by weak global tech demand).
DIIs & Retail Investors Absorb Selling Pressure
While FPIs exited, domestic institutional investors (DIIs) pumped in ₹80,000 crore, stabilizing markets. Retail participation also surged, cushioning the impact.
Winners Despite FPI Exit
Key sectors that outperformed:
– Auto & Ancillaries (Maruti, Tata Motors, M&M) – festive demand recovery.
– Infrastructure & Capital Goods (L&T, Siemens, BEL) – govt spending boost.
– FMCG & Consumer Durables (Asian Paints, Titan, Nestle) – rural revival hopes.
Will FPIs Return? Key Factors to Watch
Analysts expect stability if:
– US Fed pauses rate hikes.
– Crude prices stay low.
– India maintains strong GDP & inflation control.
Technical Outlook: Nifty 50 must breach 18,500-19,000 decisively to lure back FPIs.
Key Takeaway
India’s long-term growth remains promising. Selective buying in resilient sectors highlights domestic strength. Investors should monitor global cues but focus on fundamentally strong stocks.
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