October 2024 has marked the largest monthly outflow of foreign portfolio investments (FPI) from equities in over four years, driven by heightened geopolitical uncertainty, particularly escalating tensions in West Asia and a rally in Chinese stocks.

Current outflows have reached $9.06 billion, surpassing previous significant withdrawals, including March 2020’s $8.39 billion at the onset of the COVID-19 pandemic and June 2022’s $6.34 billion.

The most substantial sell-offs occurred early in the month, with October 3 witnessing outflows of $1.85 billion, followed by $1.15 billion on October 4.

Other notable days included October 7, with $0.97 billion in outflows, and October 17, which saw $0.87 billion exit the market.

Sector-wise, the financial services sector has been hit the hardest, experiencing outflows totalling $2.77 billion.

The oil and gas sector also faced significant selling, recording $1.47 billion in outflows, likely influenced by fluctuating global oil prices and ongoing geopolitical issues.

Additionally, the automobile sector saw $0.97 billion in outflows, reflecting concerns over supply chain disruptions and changing consumer preferences.

Despite the substantial FPI selling, domestic institutional investors (DIIs), particularly mutual funds, have largely absorbed the outflows.

Since September 30, local investors have injected $10 billion into the market, helping to stabilise benchmarks amid the selling pressure. These investors are reportedly sitting on significant cash reserves, poised to capitalise on lower market levels.

Benchmark Sensex plunged by 930.55 points while broader Nifty dropped below the 24,500 level to settle at more than two-month lows on Tuesday due to an intense sell-off across sectors and massive foreign fund exodus from the capital markets.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,979 crore on Tuesday, while domestic institutional investors (DIIs) bought equities worth ₹5,869 crore, according to exchange data.