FPI Activity:
- 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.
