FPIs withdraw Rs 4,285 cr in 3 trading sessions, Mcap of 4 firms eroded

Foreign investors pulled out Rs 4,285 crore from Indian equities in the first three trading days of the month driven by apprehensions ahead of the third-quarter earnings season and high valuations of domestic stocks. This came following an investment of Rs 15,446 crore in the entire December, data with the depositories showed. The shift in sentiment comes amid global and domestic headwinds. According to data from the National Securities Depository Limited (NSDL) the highest selling in the equity segment occurred on the very first day of 2025, with a significant net outflow of Rs 5,351 crore. This marked the biggest single-day sell-off by foreign investors in the equity markets this year.
The year 2024 marked a positive ending, but the net buying value in Indian equities by FPIs drastically reduced, declining to Rs 427 crore. India experienced a drastic drop in Foreign Portfolio Investment (FPI) inflows in 2024, with net investments falling by 99 per cent compared to the previous year. One of the primary reasons for this decline was the dominance of the US economy in the global markets.
The strong performance of the US economy, coupled with resilient stock markets and prolonged higher interest rates, directed substantial investment toward US bonds, money markets, and equities. This shift occurred at the expense of emerging markets like India. Additionally, Indian markets lost some appeal due to higher valuations, an elevated market cap-to-GDP ratio, slowing GDP growth, weaker industrial output, and reduced corporate earnings growth.
Mcap of four of top-10 most valued firms erode by Rs 96,605.66 cr
Meanwhile, the combined market valuation of four of the top-10 most valued firms eroded by Rs 96,605.66 crore last week, with HDFC Bank taking the biggest hit. While Tata Consultancy Services (TCS), HDFC Bank, ICICI Bank and State Bank of India suffered erosion from their valuation, Reliance Industries, Bharti Airtel, Infosys, ITC, Life Insurance Corporation of India (LIC) and Hindustan Unilever were the winners. Together they added Rs 82,861.16 crore in combined market valuation.The market valuation of HDFC Bank tumbled Rs 37,025.46 crore to Rs 13,37,919.84 crore. Last week, the BSE benchmark jumped 524.04 points, or 0.66 per cent, and the Nifty climbed 191.35 points, or 0.80 per cent.

(Business Correspondent)