‘The rupee is weakening mainly speculative …’: Deepak Shenoy in FPI actions in January in January

In January 2025, foreign portfolio investors (FPI) continued to withdraw from Indian capital markets, which resulted in net exits of RS 78,027 million rupees. Indian actions are experiencing a four -month drop trend, marking their worst performance in 23 years. This decrease can be attributed to factors such as deficient profits, foreign capital exits and economic uncertainty, all of which have damping the maximum previous records of the market.

The recent increase in the US dollar and the increase in the yields of American bonds, after the re -election of Donald Trump, have made US assets more attractive to investors. As a result, capital has moved away from Indian actions. While the FPIs were Net Buyers of RS 15,448 million rupees in December 2024, since then they have sold 94,017 million rupees in October and 21,612 million rupees in November, contributing even more to the capital exit of the Indian markets.

Observing the mass sale, Deepak Shenoy, CEO of the Capital Mind Financial Services asset management, said that in February so far, the FPIs have sold RS 2.6 billion rupees, but they have bought a debt of RS 13.4 billion rupees. He added that a purchase of mass debt is being carried out.

“In February until now, the FPI have sold 2600 Cr. Equity: bought 13,400 Cr. Debt. Yesterday data not included, so only the first two days of negotiation (Saturday, FPI were not traded). Basically the purchase of mass debt.

What is behind the FPI outings?

The strengthening of the US dollar and the increase in the yields of the American bonds after Donald Trump’s return to the presidency have resulted in a change of capital of the Indian actions to the most attractive assets of the United States.

Despite experiencing a significant sale in January, foreign portfolio investors (FPI) reversed this trend in December 2024, becoming net buyers of 15,448 million rupees. In contrast, the FPI had downloaded RS 94,017 million rupees and 21,612 million rupees in October and November, respectively.

The most strong United States yields, tariff concerns, slow internal economic growth and high stock valuations will only move away more FPI, said Sanjeev Hota, vice president and head of investigation of heritage management in Mirae Asset Sharekhan.

According to VK Vijayakumar, Estratega Chief of Investments of Geojit Financial Services, the main reason for the recent withdrawal of FPI is the impressive performance of the economy and corporate profits of the United States, which have exceeded the recent growth and profits trajectory India.

Vijayakumo said that although the budget has had a positive impact on the feeling, the uncertainty caused by the tariff policies of President Trump has created an interruption in the world economic landscape.

“The budget has improved feeling, and with the growth and recovery of the expected profits, the trend could be reversed. However, Trump’s tariff policies have injected uncertainty into the world economic scene. “

FPI vs dii

As foreign portfolio investors (FPI) continue to withdraw funds from Indian shares without deceleration signs, national institutions have intervened to absorb the sales pressure by injecting billions in the market. They bought shares for a total of ₹ 86,591 million rupees, almost balancing the massive sale of FPI and avoiding an important market recession.

Both the NIFTY 50 and Sensex saw decreases of more than 0.5% at the end of January, marking the fourth consecutive month of losses for the indices. This is the first instance in the last 23 years in which the key rates have experienced four consecutive months in red.

The average and small capitalization shares faced a substantial decrease during the month, with the Nifty Small Cap 100 index falling by 10%, marking the greatest monthly decrease since February 2022. In addition, the ingenious MIDCAP 100 index also saw a decrease in the 6.10%.

FPIS and government bonds

According to the 2025 economic survey published on January 31, the FPIs have invested RS 62,431 million rupees in government bonds since inclusion in the JP Morgan index. The survey also highlighted an increase in the activity of the FPI debt segment, with cumulative flows that amounted to RS 1.1 Lakh Crore from October 2023 to June 2024, after the announcement of the inclusion of bonds of the Indian government (IGB) in The JP Morgan index in October 2023.

On June 28, JP Morgan added 29 government values ​​under the fully accessible route (FAR) in its emerging market index. Currently, India has a weight of 1 percent in the index, with increased increases planned each month until March 2025. FAR allows non -residents to invest in specific values ​​of the Indian government without any investment limit.

In fiscal year 2015, the inclusion resulted in a net entrance of more than $ 3 billion in distant Indian bonds, with assets in custody of $ 28 billion as of December 15, 2024, showed the ECO survey document.