In May, Indian equity markets experienced the highest outflows in Asia, with foreign institutional investors (FIIs) withdrawing a substantial $2.89 billion. This marks the largest monthly FII outflow since January 2024.
Provisional data from the National Stock Exchange (NSE) shows that foreign investors have pulled out approximately Rs 24,000 crore from Indian markets this month, marking the most severe selloff among Asian markets.
On May 30, FIIs dramatically increased their net shorts from 5,000 contracts to 2.97 lakh contracts in a single session. Concurrently, FIIs reduced their long positions by 80%, dropping from 257,000 contracts to 51,000.
This significant reduction caused the FII long-short ratio to plummet from 50% to just 13% in one day, reflecting heightened caution ahead of the highly anticipated election results.
Again on May 30, FIIs net sold a total of Rs 19,417 crore in Indian equities, including Rs 3,050 crore in cash, Rs 7,925 crore in index futures, and Rs 8,442 crore in stock futures.
This massive withdrawal marks the biggest outflow in the Indian market since January 2024. Notably, FIIs have been consistently selling Indian equities, with only two sessions of net buying in May, indicating a significant shift as FIIs reposition their portfolios ahead of the Lok Sabha election results.
FIIs other Emerging Markets
Beyond India, FIIs have also withdrawn substantial amounts from other Asian markets: $700 million from Indonesia, $415 million from Vietnam, $210 million from Thailand, and $58 million from the Philippines.
Conversely, FIIs have made significant investments in other regions, injecting $7.59 billion into Japan, $6.26 billion into Taiwan, $1.44 billion into South Korea, and more than $500 million into Malaysia.