In the holiday-shortened week, FIIs sold to the tune of Rs 401 crore this week, thanks to the Friday purchases of Rs 4,581.34 crore.
Expert V K Vijayakumar, Chief Investment Strategist, Geojit Investments, attributes the continued FII selling to the underperformance of India markets vis-à-vis other major markets this year.
“It is important to understand a significant feature of the FII activity this year. FIIs, particularly the hedge funds, are selling in India and buying in other markets, which are driven by AI trade. The US, China, South Korea and Taiwan are regarded as AI winners while India is widely regarded as an AI loser. This perception is hugely influencing the FPI action in the ongoing global rally driven by AI trade,” Vijayakumar said.
He, however, sees a silver lining in the stretched valuations of AI-focused companies that have been attracting a large share of global investments. According to him, these stocks have reached levels where any further rally risks turning into a bubble poised to burst. “This realisation is increasingly sinking in among investors, which may help temper sustained FII selling in India,” he noted.
He added that if India’s earnings growth continues to strengthen, foreign investors are likely to turn buyers again—though that shift may still take some time.After a consecutive three months of selling in the July-September (Q3CY25) period, trends took a pause in October as FIIs turned buyers of domestic equities at Rs 14,610 crore.Also read: IPO frenzy turning murky amid lack of transparency, says market veteran Sandip Sabharwal
In Q3, FIIs sold shares worth Rs 76,619 crore, while in the April-June quarter, the foreign buying was to the tune of Rs 38,673 crore. The start to the year saw significant outflows as the FII sell-off was at a staggering Rs 1,16,574 crore between January and March.
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