India stock rally cools as foreign investors turn cautious, sell $3 billion

In January, foreign investors engaged in a significant selloff of Indian stocks, marking the highest monthly total in a year.

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The move comes as global funds opt to capitalize on profits following a recent market rally. Data compiled by Bloomberg reveals that more than $3.1 billion was withdrawn from local shares by global funds during the past month.

Contrastingly, in the preceding year of 2023, global investors exhibited a strong interest in Indian shares, accumulating a net total of $21.4 billion. This figure represents the highest influx in three years, with a notable surge of over 40 percent of foreign investments occurring during the final two months of the year. This influx played a crucial role in propelling the benchmark S&P BSE Sensex to a yearly gain of almost 19 percent, marking its eighth consecutive annual advance.