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Below the Quote on FPI from Vipul Bhowar, Senior Director - Listed Investments, Waterfield Advisors

"Elevated valuations of Indian equities, alongside concerns about corporate earnings growth, have led to a sustained outflow of foreign portfolio investments (FPIs). The earnings reports for the third quarter of fiscal year 2025 have been modest, indicating an atmosphere of uncertainty. Revisions to forward earnings have struggled, with downgrades outpacing upgrades, particularly among companies outside the Nifty 50 index.

This issue is further compounded by falling commodity prices and reduced consumer spending, which adversely impact corporate profits and diminish the appeal of Indian equities to foreign investors. The recent market sell-off has been influenced by rising US bond yields, a strengthening US dollar, and global economic uncertainties, leading to a shift in investor focus towards US assets.

Consequently, FPIs in Indian equities have reached multi-year lows due to significant selling, and investors are likely to await signs of recovery before re-entering the market. Until then, volatility in Indian markets is expected to continue due to ongoing global and domestic challenges."

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