Sun Nov 03 06:55:45 UTC 2024: ## Foreign Investors Dump Indian Stocks for China in Record Outflow
**New Delhi, November 03, 2024:** Foreign investors pulled a record ₹94,000 crore (USD 11.2 billion) from the Indian stock market in October, driven by high valuations in India and attractive valuations in China. This outflow surpassed the previous record of ₹61,973 crore withdrawn in March 2020.
The massive sell-off follows a nine-month high investment of ₹57,724 crore in September, indicating a sudden shift in sentiment. This trend is attributed to the elevated valuations of Indian equities compared to Chinese equities, where recent stimulus measures are boosting economic growth and investor confidence.
“The elevated valuations of Indian equities have triggered a shift in investments towards China, where valuations are currently more attractive,” said Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India.
The outflow has resulted in an 8% decline in benchmark indices from their peak. While the financial sector has been heavily impacted, domestic institutional investors and high net worth individuals are absorbing the selling pressure, providing some resilience.
Despite the October outflow, foreign portfolio investors (FPIs) remain net buyers in 2024, with a total investment of ₹6,593 crore. However, the future of foreign investment in India remains uncertain, influenced by global events such as geopolitical developments, interest rate movements, and the US presidential election. Domestic factors like inflation, corporate earnings, and festive season demand will also play a crucial role in shaping FPIs’ future decisions.
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