FII selling in November at Rs 26,000 crore. What lies in December?

Amid a weak Q2 earnings season, foreign institutional investors (FIIs) sold stocks worth around Rs 26,000 crore in November but the pace of selling slowed down as compared to Rs 94,000 crore in October.

"FIIs continued their selling spree in November, too. A perplexing feature of the recent FII activity is their highly erratic nature. For instance, in the three days from 23th through 25th November, FIIs were buyers. But in the next two days FIIs again turned massive sellers having sold equity for Rs 16,139 crore," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

He said the pace of sell-off reduced in November partly due to the reduced valuations caused by the correction in the market.


"The trend of FII buying through the primary market continues. In November FIIs bought stocks for Rs 17704 crores through the primary market. If we take the period up to November 29th 2024 the total FII selling for the year stands at Rs 118620 crores. During this period FIIs bought equity for Rs 103601 crores through the primary market," Vijayakumar said.

Will FIIs return to Dalal Street in December?

While investors are hoping for a Santa rally next month, both valuations as well as earnings have made the market outlook weaker. The Q2 GDP growth of 5.4%, which was lower than expected, has only added to the macro worries for investors.

FII flow in 2024 has turned negative with an outflow of about Rs 19,000 crore with analysts saying that foreign capital will chase Indian stocks only when the market corrects further and valuations become attractive.

In the last 10 years, FII flow has been positive 6 times in the month of December.