FPI Selling and Market Outlook

• FPIs ended the week as net sellers, withdrawing ₹976 crore from Indian equities.
• In the first two trading sessions, FPIs infused ₹3,126 crore into Indian equities.
• However, in the next three sessions, FPIs sold equities worth ₹4,102 crore, leading to an overall net outflow of ₹976 crore for the week.

Positive Outlook in December:

• FPIs have invested ₹21,789 crore in Indian equities so far in December 2024, which shows confidence in India’s economic growth potential.

Selling Catalysts:

• Strengthening US Dollar:
  • The US Dollar has crossed the 108 barrier and US 10-year bond yields have risen to 4.5%.
• Lack of Clarity on US Federal Reserve Policies:
  • The Fed’s third rate cut of 25 basis points in 2024 and fewer rate cuts going forward have dented global investor confidence.

Domestic Factors:

• Soft Q2 corporate earnings and macroeconomic concerns:
  • Inflation, low GDP growth, and a falling rupee have affected investor psychology.

FPI Trends in 2024:

• Heavy withdrawals in recent months:
  • A record withdrawal of ₹94,017 crore in October 2024 and ₹21,612 crore in November 2024.
• FPIs have invested ₹6,770 crore in Indian equities so far in 2024.

Key Factors to Watch:

• Global Factors:
  • The movement of the US Dollar against the Indian Rupee and the price movement of global oil, particularly Brent crude.