FIIs Continue Heavy Selling In Indian Markets, Rs 20,000 Crore Outflow In Just One Week: What's Next?

New Delhi: Foreign institutional investors (FIIs) have continued their selling spree in Indian equities this month, extending their large-scale sell-offs seen in October. So far, FIIs have offloaded shares worth Rs 23,398 crore in the first six trading sessions of November, according to data from the National Securities Depository Limited (NSDL). This follows a substantial outflow of around Rs 94,017 crore last month.Data shows that by Thursday, FIIs were net sellers at Rs 19,994 crore, with an additional Rs 3,404 crore offloaded on Friday alone. The ongoing FII selling trend, which began as a "Buy China, Sell India" approach in response to Chinese economic stimulus efforts, intensified further after disappointing Q2 results from Indian companies led to concerns over high valuations in the Indian market.

What's Next?Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the ongoing sell-off, saying that the trend is expected to persist in the near future. "The FII selling trend is likely to continue in the near-term till data indicate the possibility of a trend reversal. If the Q3 results and leading indicators reflect recovery in earnings, the scenario can change with FIIs reducing selling and even turning buyers. Investors will have to wait and watch for the data. Meanwhile, investors can consider shifting some money from the overvalued mid and smallcaps to quality largecaps. This strategy will turn profitable in the medium to long run," he said.

Jefferies, a global investment firm, has downgraded its earnings forecasts for 63 per cent of the 121 companies it tracks in India, marking the highest rate of downgrades since early 2020. In October, FIIs sold off the most in banking and financial stocks, with an outflow of around Rs 26,139 crore. They also reduced holdings in oil and gas stocks by Rs 21,444 crore, FMCG stocks by Rs 11,582 crore, and the auto sector by Rs 10,440 crore, as per NSDL data.Despite the large FII outflows, the Indian stock market's benchmark indices have shown resilience due to strong buying from mutual funds and other domestic institutional investors. However, the Sensex and Nifty are down around 7 per cent from their September-end highs.Interestingly, amid the sell-off, around 40-50 new foreign portfolio investors (FPIs) have registered to enter the Indian market, indicating continued interest from global investors despite recent volatility.( Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. Times Now Digital suggests its readers/audience to consult their financial advisors before making any money-related decisions.)