FPI inflows in equities drop to Rs 7,320 crore in August due to higher valuations

Foreign Portfolio Investors (FPIs) infused Rs 7,320 crore into Indian equities in August, a significant drop from Rs 32,365 crore in July and Rs 26,565 crore in June. The decline is attributed to high stock valuations and the unwinding of the Yen carry trade after the Bank of Japan raised interest rates. Despite the lower inflows, FPIs remain cautious due to India’s high market valuations, with Nifty trading at over 20 times estimated FY25 earnings, making it the most expensive market globally. FPIs are likely to continue their cautious approach, influenced by domestic political stability, economic indicators, global interest rate movements, market valuations, sectoral preferences, and the attractiveness of the debt market.