FPIs Dump ₹58,711 Crore in Indian Stocks in October, Shift to Cheaper Chinese Markets Amid ‘Sell India, Buy China’ Trend

Foreign Portfolio Investors (FPIs) have sold a significant amount of Indian stocks, totalling Rs 58,711 crore in October so far. This has erased a large portion of the overall investments made in 2024 within just eight trading sessions. By the end of September, FPIs had invested Rs 1,00,245 crore, but now that number has dropped to Rs 41,899 crore.

In September, FPIs purchased Rs 57,724 crore worth of Indian equities. In August, they bought Rs 7,322 crore, which was lower than the Rs 32,359 crore they purchased in July. June saw FPIs as net buyers with Rs 26,565 crore, but they had sold Rs 8,671 crore in April and Rs 25,586 crore in May. At the start of 2024, FPIs sold Rs 25,744 crore worth of stocks in January but turned into buyers in February and March, investing Rs 1,539 crore and Rs 35,098 crore respectively.

ADVERTISEMENT

Be part of our community by downloading and registering on the Angel One app. Your support helps us keep delivering quality content.

On the last trading day, FPIs sold Rs 4,162.66 crore worth of shares, while Domestic Institutional Investors (DIIs) bought Rs 3,730.87 crore worth of stocks.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, FPIs are following a “Sell India, Buy China” strategy after China introduced economic stimulus measures to boost its slowing economy. He explained that Chinese stocks are currently cheaper, with the Hang Seng index (which lists Chinese stocks in Hong Kong) trading at a price-to-earnings ratio (PE) of 12, compared to the Nifty index in India trading at a PE of 23 times its estimated earnings for FY25.

Vijayakumar believes more FPI money will likely flow into Chinese stocks due to the large gap in valuations between the two markets. However, he also noted that India’s growth potential is stronger than China’s, which justifies India’s higher stock valuations.

While Chinese stocks have risen due to government stimulus, experts argue that the country still faces deeper economic issues. Despite FPIs selling off Indian stocks, DIIs have remained active buyers, and Vijayakumar expects this trend of FII selling and DII buying to continue in the near term.