Foreign portfolio investors (FPIs) have withdrawn Rs 26,533 crore from the Indian stock markets so far this month. Due to weak quarterly results of companies and the high valuation of domestic stocks, FPIs are investing in the Chinese market.

Due to this, they continue to be sellers in the Indian market. Although FPIs continue to sell, their net withdrawal has decreased significantly compared to October. FPIs had withdrawn a net Rs 94,017 crore ($11.2 billion) from the Indian market in October.

According to depository data, after this latest withdrawal, foreign investors have withdrawn a net of Rs 19,940 crore from the Indian stock market so far in 2024.

Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said that going forward, the flow of foreign investors in the Indian stock market will depend on the policies of the newly elected US President Donald Trump.

Apart from this, inflation and policy rates will also be important for the attitude of foreign investors. Srivastava said that the third-quarter results of companies and geopolitical developments will also be important for the direction of FPI.

According to the data, FPIs have withdrawn a net Rs 26,533 crore from shares so far this month i.e. till November 22. Whereas in October, they had made a net withdrawal of Rs 94,017 crore, which was the highest figure of their withdrawal in any one month.

In September, FPIs had invested Rs 57,724 crore in the Indian stock market, which was a nine-month high for their investment.

Srivastava said concerns persist over the high valuations of Indian stocks, leading FPIs to shift to markets with more attractive valuations.

He said China is receiving inflows from foreign investors at the expense of India due to its attractive valuations and also the fact that China has recently announced several stimulus measures to boost its slowing economy.

He said that the quarterly results of Indian companies have also not been as per expectations and inflation also remains at a high level, due to which FPIs are withdrawing. VK Vijayakumar, Chief Investment Strategist, at Geojit Financial Services, said that foreign investors are worried about the earnings of companies in the current financial year.

He said that the attitude of 'sell in India and buy in China' is now over. Donald Trump's 'effect' is also in its last phase as valuations in America have also reached high levels. According to the data, FPIs have withdrawn Rs 1,110 crore from bonds under the normal limit so far this month. At the same time, they have invested Rs 872 crore through the Voluntary Retention Route (VRR). Overall, FPIs have invested Rs 1.05 lakh crore in the bond market so far this year.