 |
|
The Indian stock market witnessed a significant sell-off in October 2023, with Foreign Portfolio Investors (FPIs) exiting Indian equities at a record pace. According to data from the National Securities Depository Limited (NSDL), FPIs offloaded a total of Rs 77,701 crore worth of Indian equities during the month, surpassing the previous record set in March 2020 during the initial stages of the COVID-19 pandemic.
While the pace of selling slowed down in the latter half of October, the overall impact was substantial, highlighting the anxieties prevailing in the global financial landscape. The FPI sell-off was attributed to a confluence of factors, including the strengthening US dollar, rising US interest rates, and the “no-landing” scenario for the US economy, which has pushed investors towards safer assets.
Despite the significant FPI outflows, the Indian stock market indices, Nifty 50 and Sensex, demonstrated resilience, falling only by around 5 per cent from their 52-week highs. This resilience was largely attributed to the robust support provided by domestic investors, who continued to inject capital into the market.
Data from the National Stock Exchange (NSE) revealed that Domestic Institutional Investors (DIIs) played a crucial role in offsetting the FPI selling pressure. During October, DIIs invested Rs 74,176.20 crore in equities, demonstrating their faith in the long-term prospects of the Indian economy. This dynamic highlights the growing importance of domestic investors in stabilizing the Indian stock market during periods of global investor uncertainty.
The article concludes by emphasizing the key role played by domestic investors in mitigating the impact of the FPI sell-off. The strong domestic participation underscores the increasing importance of local investors in supporting the Indian stock market, especially during periods of global volatility. This trend suggests a shift towards greater reliance on domestic investors to drive the Indian equity market's growth and stability.
Source: October marks highest monthly FPI sell-off in history with ₹77,701 crores