New Delhi. Foreign investors have invested very less money in Indian stock markets this year as compared to 2023. In the year 2023, foreign investors had made a net investment of Rs 1.71 lakh crore in the stock market, which has remained only Rs 5,052 crore in the year 2024. In the year 2024, FPIs were sellers in the months of January, April, May, October and November. After foreign investors turned away from the Indian stock market, now the question is arising whether the angry investors will turn to the Indian markets next year?

Vineet Bolinjkar, Head of Research, Ventura Securities, says that looking towards 2025, the flow of foreign portfolio investors (FPIs) in Indian stocks may improve. This will be supported by a cyclical upsurge in corporate earnings, especially in domestic-oriented sectors such as capital goods, manufacturing and infrastructure. However, high valuations and cheap options in other emerging markets such as ASEAN and Latin America may hamper these flows. He said that apart from this, concerns due to a prolonged global recession may affect investor sentiment and their interest in risky assets.

Favorable conditions may be created
Anand Rathi Wealth Limited Deputy CEO Firoz Aziz said that geopolitical tensions, central bank interest rate cuts and possible US tariff restrictions could create favorable conditions for FPI inflows in Indian markets. Narendra Singh, Manager and Founder of 'Smallcase', Growth Investing, said that on the domestic front, factors such as high valuations, weak corporate earnings for the September quarter, expectations of weak results for December, rising inflation, slow gross domestic product (GDP) growth and weak rupee have reduced investor confidence. However, despite the volatility, FPIs showed signs of revival in December. So far, net inflows have been more than Rs 20,071 crore, indicating renewed interest in the Indian stock markets.

Investment of Rs 5,052 crore
According to data available with the depositories, so far foreign portfolio investors (FPIs) have made a net investment of more than Rs 5,052 crore in the Indian stock markets and Rs 1.12 lakh crore (till December 24) in the debt market. Earlier in 2023, a net investment of Rs 1.71 lakh crore was made in the stock market, which was driven by optimism about India's resilient economic fundamentals. In contrast, in 2022, the highest net selling of Rs 1.21 lakh crore was recorded due to aggressive rate hikes by global central banks. However, before this, FPIs had invested in the three years 2019, 2020 and 2021.

Himanshu Srivastava of Morningstar Investment said that the low investment in the Indian stock market was mainly due to high valuations, which led investors to invest in the attractively valued Chinese stock market. This shift was further fueled by a series of stimulus measures introduced by China to boost economic growth, which increased the attractiveness of its stock market. In addition, the increase in geopolitical tensions, especially the Israel-Iran conflict, increased risk aversion, pushing investors towards safe assets.