Foreign investors are withdrawing funds from Indian stocks amid a rally driven by the development of artificial intelligence in the US, South Korea, and Taiwan. This was stated by Ashish Chauhan, Managing Director and CEO of the National Stock Exchange of India (NSE), who added that some of these funds may return to India when the current cycle ends. "Due to the AI story, the US market has grown from $25 trillion to about $75 trillion, a similar trend is observed in Korea and Taiwan," Chauhan said during a conversation with journalists after the NSE's listing on the BSE.
"FPIs are fund managers who withdraw their money and go elsewhere for a cycle, and they do this often. Since they are foreigners, they can withdraw money and circulate it around," he added. Chauhan noted that the current cycle, driven by AI, will eventually end, which may bring foreign capital back into Indian stocks. However, he emphasized that this is his personal opinion about the market cycle. "AI has reached its peak. When this cycle ends, that money will return. However, this is just my opinion; this is how I see it," Chauhan said.
These comments came amid a resumption of FPI sales in Indian stocks in September after foreign investors were net buyers in July and August. According to NSDL, FPIs invested about ₹11,045 crore in July and ₹10,231 crore in August, but withdrew ₹23,676 crore by September 19. The sales followed a two-month series of purchases and occurred amid global market uncertainty, high US bond yields, rising oil prices, and currency pressure. NSDL data showed that on September 25, FPIs were net sellers of stocks at ₹4,521.96 crore, although they were net buyers on September 24.
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