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Weekly Musings – FPI flows for week ended January 17, 2025

20 Jan 2025 , 04:42 AM

FPI FLOWS STAY UNDER PRESSURE DURING THE WEEK

There seems to be just no relenting on FPI outflows; as it intensified in the latest week to January 17, 2025. After FPI selling of $2,086 Million in equities in the previous week; the latest week to 17-Jan saw intense FPI selling to the tune of $2,568 Million. Once again, FPIs were net sellers on all 5 trading sessions. FPIs have been net sellers of $5.90 Billion in just the last 4 weeks; a trend of FPI selling that has continued since the start of October 2024.

There have been several triggers for this relentless FPI selling. Firstly, FPIs are concerned about the Indian rupee, inching closer to ₹87/$. The last 2 weeks also saw a spike in Brent crude prices, after the US widened and tightened sanctions on Russia. The Buffett Ratio for India is at 147% and that is making FPIs uncomfortable. Despite positive cues like the Israel Hamas ceasefire and better IT sector results in Q3FY25, FPI selling has been rampant.

MACRO FPI FLOW PICTURE UP TO JANUARY 17, 2025

The table captures monthly FPI flows into equity and debt for last 4 calendar years.

Calendar

Month

FPI Flows Secondary FPI Flows Primary FPI Flows Equity FPI Flows Debt/Hybrid Overall FPI Flows
Calendar 2022 (₹ Crore) (146,048.38) 24,608.94 (121,439.44) (11,375.78) (132,815.22)
Calendar 2023 (₹ Crore) 1,27,759.75 43,347.14 1,71,106.89 65,954.38 2,37,061.27
Calendar 2024 (₹ Crore) (1,21,210.21) 1,21,637.15 426.94 1,65,342.98 1,65,769.92
Jan-2025 (₹ Crore) # (45,498.00) 1,101.78 (44,396.22) (10,745.22) (55,141.44)
Total for 2025 (₹ Crore) (45,498.00) 1,101.78 (44,396.22) (10,745.22) (55,141.44)
For 2025 ($ Million) (5,283.07) 128.05 (5,155.02) (1,255.90) (6,410.92)
# – Recent Data is up to January 17, 2025 

Data Source: NSDL (Negative figures in brackets)

For the just concluded year 2024, almost the entire FPI flows comprised only of debt as equity secondary market outflows, neutralized equity IPO inflows. Year 2025 has begun on a very cautious note with $6,411 Million of net selling overall by FPIs. This included $5,155 Million of net selling in equities and $1,256 Million of net selling in debt. However, these are early days still and the picture of FPI allocation to Indian equities for 2025 is still evolving.

FPI SENTIMENTS – THE WEEK THAT WAS

For the week to January 17, 2025, FPIs remained net sellers to the tune  of $(2,568) Million, higher than the previous week. Here is the week that was.

  • India consumer inflation tapered to 5.22% in December 2024 on the back of lower food inflation. However, oil inflation and core inflation stayed under pressure. CPI inflation at 5.22% is already 122 bps above the RBI long-term inflation median target of 4.0%.
  • The US Bureau of Labour Statistics (BLS) also announced the consumer inflation for December 2024; sharply higher at 2.9%. Even in the US, the spike was about fuel prices, but food prices were also under pressure; although core inflation tapered lower.
  • December merchandise trade deficit for India came in at $21.94 Billion. However, there was a downward adjustment of gold imports due to double counting at SEZ level. This has reduced the overall deficit for FY25 by $10.23 Billion, a substantial improvement.
  • While CPI inflation tapered in India for December 2024, the wholesale inflation spiked from 1.89% to 2.37%. Food and manufacturing inflation was flat, but minerals inflation and oil inflation spiked. This could pressure end-prices due to strong externalities.
  • Rupee weakened further to ₹86.60/$ for the week, getting very close to ₹87/$. FPI outflows, dollar index strength, Yuan weakness, and valuation concerns kept the rupee under pressure, almost offsetting the intervention efforts of the RBI.
  • Quarterly numbers of Reliance and Infosys were better than expected, with Infy raising its CC guidance for the third time in FY25. However, Axis Bank numbers were under stress as NIMs came under pressure, while loan growth and deposit growth lagged.
  • Even as the IPO market has stayed relatively quiet, all eyes are focused on whether Tata Sons will have to do an IPO. RBI has put the decision on Tata Sons’ NBFC registration surrender on hold, even as Tata Sons was included in the list of Upper Layer NBFCs.

DAILY FPI EQUITY FLOWS FOR LAST 4 ROLLING WEEKS

Here is the last 4 rolling weeks data on FPI flows in rupee terms and in dollar terms.

Date FPI Flow (₹ Crore) Cumulative flows FPI Flow($ Million) Cumulative flows
23-Dec-24 -1,872.95 -1,872.95 -220.12 -220.12
24-Dec-24 155.40 -1,717.55 18.27 -201.85
25-Dec-24 0.00 -1,717.55 0.00 -201.85
26-Dec-24 -1,804.10 -3,521.65 -211.77 -413.62
27-Dec-24 -1,592.20 -5,113.85 -186.73 -600.35
30-Dec-24 370.17 -4,743.68 43.25 -557.10
31-Dec-24 -1,598.78 -6,342.46 -187.07 -744.17
01-Jan-25 -5,351.05 -11,693.51 -624.96 -1,369.13
02-Jan-25 -597.46 -12,290.97 -69.70 -1,438.83
03-Jan-25 1,663.60 -10,627.37 193.93 -1,244.90
06-Jan-25 -2,874.85 -13,502.22 -335.22 -1,580.12
07-Jan-25 -3,055.16 -16,557.38 -355.96 -1,936.08
08-Jan-25 -1,220.16 -17,777.54 -142.34 -2,078.42
09-Jan-25 -3,729.30 -21,506.84 -434.43 -2,512.85
10-Jan-25 -7,029.38 -28,536.22 -818.50 -3,331.35
13-Jan-25 -1,421.40 -29,957.62 -165.48 -3,496.83
14-Jan-25 -4,276.46 -34,234.08 -494.75 -3,991.58
15-Jan-25 -7,766.43 -42,000.51 -897.34 -4,888.92
16-Jan-25 -4,396.93 -46,397.44 -508.31 -5,397.23
17-Jan-25 -4,341.24 -50,738.68 -501.96 -5,899.19

Data Source: NSDL

  • In last 7 rolling weeks, FPIs saw net outflows of $(2086) Million, $(645) Million, $(600) Million, $(114) Million, $(199) Million; net inflows of $2,886 Million, and $587 Million. In the week to January 17, 2025 net FPI equity outflows stood at $(2,568) Million.
  • If you look at the last 4 rolling weeks on a cumulative basis, total net FPI outflows from equities were to the tune ₹(50,739) Crore or $(5,899) Million; with the broad trend still veering towards FPI sell-off.

The big data points that the FPIs will watch out for in next few days include; Trump swearing in and action plan, US Fed policy statement, and the Union Budget 2025-26 presentation on February 01, 2025.

Related Tags

  • Foreign Investors
  • FPIs
  • nifty
  • PortfolioFlows
  • RBIPolicy
  • sensex
  • StockMarkets
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