NEW DELHI: Foreign portfolio investors (FPIs) are likely to maintain a cautious stance on Indian equities until there is more clarity on Q3 FY25 earnings recovery and fair market valuations, according to a report by Shriram Mutual Funds.
Despite active participation throughout 2024, FPIs ended the year on a cautious note, with equity investments plummeting by nearly 99 per cent
FPI cautious on Indian market until further clarity on Q3 results compared to 2023. October recorded the highest FPI outflows, with equities worth Rs 91,934 crore being sold, as per data provided by national securities depository limited (NSDL).
Domestic institutional investors, on the other hand, provided strong support, purchasing equities worth Rs 89,740 crore in October alone.
In 2024, DIIs bought equities amounting Rs 4.18 lakh crore, while FPIs recorded net sales of Rs 72 crore. This consistent domestic backing has helped stabilise the Indian equity market despite external pressures.
The report also highlighted the Indian rupee's depreciation to an all-time low of Rs 85.8 against US dollar, weighted by foreign outflows, triggered due to China’s announcement of new measures.
India’s forex reserves reflected the strain, declining by $4.112 billion in the week ending 27 December, plunging to $640.279 billion, as per RBI data.
Globally, market participants are keeping a close watch on the US Inauguration Day on 20 January 2025.
The report noted "All eyes on US Inauguration Day on 20th Jan-25, can lead to short-term instability in market after Trump policies".
Furthermore, disruptions in global supply chains were causing businesses to accelerate their orders, amplifying market volatility, it said.
The report highlighted the need to opt for cautious optimism as a bouquet of domestic and global factors would work together in determining the markets in upcoming months.
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Read MoreThe TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.
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