‘Domestic savers to offset foreign investor exodus’

• Foreign Institutional and Portfolio Investors (FIIs and FPIs) may not deter domestic investors’ inflows into Indian equity markets due to confidence in medium-term returns.
• FIIs sold the most Indian equities in October, making it the worst month for foreign investors.
• In October alone, FIIs sold a net ₹94,000 crore in equities, reversing the ₹57,000 crore inflows received from them in the previous month.
• Domestic Institutional Investors (DIIs) are confident in the Indian markets, despite the short-term volatility.
• Experts suggest that the steady DII buying kept the market buoyant despite the FII outflows.
• Global factors, such as China’s recent stimulus package and rising U.S. bond yields, are the stronger determinants of this FII sell-off.
• Domestically, lukewarm earnings and high valuations have contributed to the selloff, but this is not as significant as the global factors.
• A sector-wise analysis of FII flows signals weakening trends, with seven of 24 sectors witnessing net FII selling in September.
• DIIs bought a little more than ₹1 lakh crore of Indian equities in October, covering for the FII sales.