FII selling slows in November 2024 as India markets stabilise post October steep fall: Report

New Delhi: After a steep correction in October 2024, where the Nifty 50 index fell around 6 per cent and closed 8 per cent lower than its all-time highs, FII outflows reduced in November, a sharp drop from October outflows says a report by JM Financials.

The benchmark index remained largely flat in November, reflecting a calmer trading environment. Foreign Institutional Investor (FII) activity also exhibited a notable slowdown in selling pressure.

FII outflows reduced to Rs182 billion (USD 2.2 billion) in November, a sharp drop from Rs919 billion (USD 10.9 billion) in October. Interestingly, the month showcased a tale of two halves. While FIIs remained net sellers in the first half of November, with outflows of Rs195 billion (USD 2.3 billion), they turned net buyers in the second half, bringing in Rs13 billion (USD 159 million).

This shift was further reinforced in the last seven days of the month, when FIIs recorded net inflows of Rs52.6 billion (USD 619 million).

FII flows varied significantly across sectors. The Oil and Gas and Auto sectors faced the largest outflows for the second consecutive month, with USD 1.6 billion and USD 884 million, respectively.

Other sectors like Telecom (USD 601 million) and FMCG (USD 167 million) also saw significant selling activity. On the other hand, sectors such as IT, Banking, Financial Services, and Insurance (BFSI), and Realty attracted notable inflows.

IT led the way with USD 653 million, followed by BFSI at USD 296 million and Realty at USD 244 million. These inflows highlight investor interest in sectors viewed as more resilient or offering growth potential.
FII shareholding in Indian equities inched up slightly to 16.1 per cent in November 2024 from 16 per cent in October, which was the lowest level in 12 years.

However, this figure remains lower year-on-year compared to 16.8 per cent in November 2023. FII Equity Assets under Custody (AUC) also showed improvement, rising to Rs71.9 trillion at the end of November from Rs71.1 trillion in October, signalling renewed investor interest in the Indian market.