Foreign Institutional Investors (FIIs) reduced their gross equity investments to $2.5 billion in January. This marks a 15-month low and shows a significant 42% drop from the 12-month average of $43.06 billion. The figure also represents more than a 50% decline from the record gross buying of $52 billion in September 2024.
Domestic and global challenges, like geopolitical tensions, economic slowdown, and high interest rates, drove this decline. The Sensex and Nifty indices fell over 3% each in January. Broader indices, including BSE MidCap and BSE SmallCap, also saw losses of over 8% each.
Despite these challenges, FIIs held 16.1% ownership in Indian equities by mid-January. This is slightly above the 12-year low of 16% recorded in October 2024. However, the gross buy-to-sale ratio hit a 31-month low of 0.76, indicating cautious investment sentiment.
