FPIs: FPIs sell Rs 25,744 crore of shares in January

Mumbai: Overseas investors offloaded ₹25,744 crore worth of Indian stocks in January after two straight months of purchases as receding hopes of an interest rate cut by the US Federal Reserve in March led to some risk-off sentiment. Analysts said inflows in February will hinge on the Fed’s commentary on the direction of interest rates after its policy meeting on January 31.

In the past 10 years in February, foreign investors have been buyers on six occasions and sellers on four. In the past two years, February has seen outflows.

Analysts said that chances of faster interest rate cuts are diminishing in the wake of stubborn inflationary pressures, resulting in US Treasury yields firming up.

“The Fed meeting is a key event that will decide the direction of foreign flows,” said Sriram Velayudhan, Senior Vice President, IIFL Securities. “If the commentary is hawkish, there may be a possibility of outflows.”

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