NEW DELHI: Foreign portfolio investors (FPIs) have bought aggressively in Indian equities this month, pouring in a net Rs 45,970 crore in November so far, news agency IANS reported on Sunday, 8 November, as a global sell-off in artificial-intelligence stocks pushed money toward India, which investors widely regard as a non-AI trade.
Source: IANS
The inflow is the money behind the record week this desk reported on Friday, when the Nifty 50 closed at 25,030.35 — but Sunday's figure updates and extends it: the cumulative November total now stands well above the roughly Rs 35,781 crore of foreign buying over five sessions cited in Friday's weekly summary, and analysts now attribute the turn explicitly to the AI sell-off abroad rather than to domestic factors alone.
Why the money moved
The sudden change in FPI stance was triggered by the AI sell-off in the US and other AI markets like South Korea, Taiwan and Japan, analysts cited by IANS said. That sell-off, in turn, was triggered by fears surrounding data-centre spending in the US; market participants said the Democrats, who won both chambers of Congress in the midterms, are opposed to indiscriminate data-centre spending and will demand guard rails for AI.
"Furthermore, the impressive earnings growth in India and the attractive large-cap valuations, made India a favoured investment destination," said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, quoted by IANS. FPIs turned major buyers in index heavyweights in financials, IT, automobiles and telecom, while domestic institutional investors (DIIs) turned sellers on all days of the week — a complete role reversal, the report said, with FPI buying and a consequent short squeeze triggering the rally.
Separate Bloomberg-based reporting by The Hindu BusinessLine put India's early-November inflow at $4.11 billion, the highest among emerging markets and far ahead of Dubai, the second-highest recipient at $165 million, while Taiwan recorded the largest outflow at $15.7 billion and South Korea saw $7.93 billion leave. BusinessLine also noted the rupee has appreciated 1.94 per cent against the dollar since 12 October as crude prices declined, and that NBFC stocks led the Nifty's gains, with Shriram Finance up 15.26 per cent in the week.
Source: The Hindu BusinessLine
A third count, attributed to NSDL data in ANI reporting on Sunday, put this week's FPI equity inflow at Rs 38,971 crore — a different, weekly window that corroborates the scale of the buying even though the cumulative November totals differ by source and method.
Source: ANI via Indian Economic Observer
Analysts cited by IANS say the sustainability of these foreign inflows is the key variable in the coming weeks, with heavy domestic profit-booking leaving the rally reliant on FII support; market participants will also watch Brent crude prices and US-Iran developments. Bank of Baroda chief economist Madan Sabnavis, quoted by BusinessLine, cautioned that one week is too short a period to ascertain patterns and firm conclusions need inflows to sustain for the next few months.
Bank Nifty closed 8 per cent higher during the week, while broader markets relatively underperformed, with the Nifty Midcap 100 up 5.8 per cent and the Nifty Smallcap 100 up 2.8 per cent, IANS reported. Sources: IANS, The Hindu BusinessLine (Bloomberg data) and ANI.