{"id":26460,"date":"2023-10-09T17:55:47","date_gmt":"2023-10-09T12:25:47","guid":{"rendered":"https:\/\/blog.researchandranking.com\/?p=26460"},"modified":"2023-10-12T11:06:03","modified_gmt":"2023-10-12T05:36:03","slug":"fpis-dump-indian-equities-in-october-23","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/fpis-dump-indian-equities-in-october-23\/","title":{"rendered":"FPI\u2019s dump Indian Equities in October &#8217;23!"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div>\n<p>The first week of October witnessed an interesting development in the Indian equities market \u2013 Foreign Portfolio Investors, commonly known as FPIs, withdrew their <a href=\"https:\/\/www.equentis.com\/blog\/mukul-agrawal-portfolio-shareholdings-investments-all-you-need-to-know\/\">investments<\/a>. This abrupt change follows several months of consistent buying by FPIs, raising questions about the factors influencing this shift.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full is-resized\"><img fetchpriority=\"high\" decoding=\"async\" src=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-59.png\" alt=\"\" class=\"wp-image-26461\" style=\"width:591px;height:355px\" width=\"591\" height=\"355\" title=\"\" srcset=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-59.png 940w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-59-300x180.png 300w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-59-768x462.png 768w\" sizes=\"(max-width: 591px) 100vw, 591px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Exploring the Recent Trend<\/h3>\n\n\n\n<p>For the first two months of the calendar year, FPIs were net sellers. However, from March to August, they displayed unwavering interest in Indian equities, infusing a substantial sum of 1.74 lakh crore. It seemed like India had become an attractive investment destination for FPIs among emerging economies.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe title=\"&quot;Market Update: FPIs Withdraw 8000 Crore | Israel Conflict&#039;s Oil Impact | Business Confidence Soars&quot;\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/16BHJL0NbjA?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">The Sudden Change<\/h3>\n\n\n\n<p>The turning point came in September and the first week of October when FPIs became net sellers again, pulling out a significant 14,768 crores and nearly 8,000 crores, respectively. This abrupt reversal in behavior sent shockwaves through the market.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Factors at Play<\/h3>\n\n\n\n<p>Multiple factors have contributed to this change in FPI sentiment. Firstly, the appreciation of the US dollar has affected their investment decisions. The steady rise in US bond yields has also been a significant influencer.<\/p>\n\n\n\n<p>Notably, the 10-year US Treasury bond yield has recently surpassed 4.8%, marking the highest level in over 16 years. This figure is nearly 45% higher than the 25-year average yield of 3.3%. Such high yields have lured investors towards the safety of US bonds.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full is-resized\"><img decoding=\"async\" src=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-60.png\" alt=\"\" class=\"wp-image-26462\" style=\"width:677px;height:134px\" width=\"677\" height=\"134\" title=\"\" srcset=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-60.png 940w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-60-300x59.png 300w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-60-768x151.png 768w\" sizes=\"(max-width: 677px) 100vw, 677px\" \/><figcaption class=\"wp-element-caption\">Source: Zee Business<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-secondary-color\">Key Takeaways<\/mark><\/h3>\n\n\n\n<p>So, what does this mean for India&#8217;s financial landscape? The shift in FPI behavior has raised concerns about the Indian rupee&#8217;s depreciation. When US bond yields rise, FPIs tend to reallocate their investments away from Indian equities and into the more stable US bonds. This can subsequently exert downward pressure on the value of the Indian rupee.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full is-resized\"><img decoding=\"async\" src=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-61.png\" alt=\"\" class=\"wp-image-26464\" style=\"width:679px;height:152px\" width=\"679\" height=\"152\" title=\"\" srcset=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-61.png 940w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-61-300x67.png 300w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-61-768x172.png 768w\" sizes=\"(max-width: 679px) 100vw, 679px\" \/><figcaption class=\"wp-element-caption\">Source: Business Standard<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">The Domestic Cushion<\/h3>\n\n\n\n<p>Fortunately, the impact of FPIs selling off Indian equities has been somewhat offset by domestic institutional investors who have continued to buy Indian assets. This has provided a certain degree of stability in the market.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Bigger Picture<\/h3>\n\n\n\n<p>To add to the complexity, other factors have come into play. Higher crude oil prices, persistent <a href=\"https:\/\/www.equentis.com\/blog\/10-common-effects-of-inflation-on-the-economy\/\">inflation<\/a>, and elevated interest <a href=\"https:\/\/www.equentis.com\/blog\/old-tax-regime-slabs\/\">rates<\/a> have made foreign investors cautious about their approach to the Indian market. These factors collectively influence their investment strategies.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-62.png\" alt=\"\" class=\"wp-image-26466\" style=\"width:681px;height:154px\" width=\"681\" height=\"154\" title=\"\" srcset=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-62.png 940w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-62-300x68.png 300w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2023\/10\/image-62-768x174.png 768w\" sizes=\"(max-width: 681px) 100vw, 681px\" \/><figcaption class=\"wp-element-caption\">Source: Economic Times<\/figcaption><\/figure>\n\n\n\n<p>Additionally, the ongoing conflict in Israel can potentially disrupt <a href=\"https:\/\/www.equentis.com\/blog\/key-global-events-that-can-influence-the-stock-market-this-week-3\/\">global<\/a> trade and affect investor sentiments. Notably, Iran, as a major oil producer, could significantly impact crude oil prices in the near term. These global and domestic factors have made the Indian market dynamic and challenging.<\/p>\n\n\n\n<p>In conclusion, India has experienced a significant shift in FPI behavior during September and October. The rise in US bond yields and other economic variables have prompted FPIs to reevaluate their investment portfolios. However, the resilience of domestic institutional investors has helped mitigate the impact to some extent. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">FAQs<\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h5 class=\"saswp-faq-question-title \">Why did FPIs turn into net sellers in October?<\/h5><p class=\"saswp-faq-answer-text\">FPIs became net sellers due to the appreciation of the US dollar and the rise in US bond yields, which made US bonds more attractive investments.<\/p><li style=\"list-style-type: none\"><h5 class=\"saswp-faq-question-title \">Is India still an attractive destination for foreign investments?<\/h5><p class=\"saswp-faq-answer-text\">Yes, India may still be attractive, but various global and domestic factors are currently at play, making the market more dynamic and challenging for investors to navigate.<\/p><\/ul><\/div>","protected":false},"excerpt":{"rendered":"<p>The first week of October witnessed an interesting development in the Indian equities market \u2013 Foreign Portfolio Investors, commonly known as FPIs, withdrew their investments. <\/p>\n","protected":false},"author":5,"featured_media":26472,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center 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