December 2023: FII Trends – Selling Shares but Investing in India!

In December, foreign investors in India continued to sell shares, with net withdrawals reaching Rs 656 crore so far. However, this selling activity has slowed down compared to the more intense selling seen in October and November. For the whole year up to December 27, foreign investors sold shares worth Rs 1,19,277 crore on the exchanges.

There were some days in early December when foreign investors did buy, but they soon started selling again. Interestingly, they put in Rs 1,20,932 crore in the primary market, showing they are actually investing more in India this year.

V K Vijayakumar, an expert at Geojit Financial Services, pointed out that foreign investors have been consistent in buying shares through the primary market, with Rs 17,331 crore invested in December alone. He mentioned that the selling on the exchanges is mainly because some stocks are seen as too expensive, while the primary market has better value.

Data shows that foreign investors are also interested in the debt market, having invested Rs 112,409 crore this year. Looking ahead to early 2025, there may be more selling pressure in the stock market. Vijayakumar thinks foreign investors could start selling again as the US dollar gains strength (currently above 108) and US government bonds are yielding around 4.4%. However, he believes they will return as buyers when there are clear signs of growth in the Indian economy.

(Disclaimer: The expert opinions mentioned here are their own and do not reflect the views of thellv.news)