Home Business Foreign investors pulled out around Rs 6,000 crore in October

Foreign investors pulled out around Rs 6,000 crore in October

In terms of sectors, FPIs have been the sellers in financials, FMCG and IT in October.

New Delhi:

Foreign investors have pulled out around Rs 6,000 crore from Indian stock markets so far this month in view of the strengthening of the US dollar against the rupee.

With this, total outflows by foreign portfolio investors (FPIs) have reached Rs 1.75 lakh crore so far in 2022, data from the depositories showed.

Going forward, FPI inflows are expected to remain volatile in the coming months due to ongoing geopolitical risks, high inflation, expectations of rising treasury yields, etc, said Shrikant Chauhan, Head-Equity Research (Retail), Kotak Securities.

VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services said.

According to the data, FPIs pulled out Rs 5,992 crore from equities in October (till 21).

However, during the last few days, FPIs had slowed down their sales substantially.

A major trend in the market is that continued buying by domestic institutional investors (DIIs) and retail investors is overwhelming the selling of FPIs.

Vijayakumar said, “If FPIs want to buy the shares they have sold, they will have to pay a very high price. This realization is slowing their selling even in negative macro construction, where US bond yields are rising and rupee depreciates. The decline is coming.”

Withdrawals have taken place so far this month after withdrawing over Rs 7,600 crore in September due to a tough stance by the US Federal Reserve and a sharp depreciation in the rupee.

Earlier, FPIs had made a net investment of Rs 51,200 crore in August and around Rs 5,000 crore in July. Before July, foreign investors were net sellers in Indian equities for nine consecutive months, starting in October last year.

Himanshu Srivastava, Associate Director- Manager Research, Morningstar India, said the latest outflow by FPIs was largely driven by concerns of monetary policy tightening by the US Fed as well as other central banks globally, which would hamper global economic growth. Can do.

“More than any specific risk to India, dollar flight in volatile markets is the primary theme that drives the latest outflows,” said Kanika Agarwal, co-founder of Upside AI.

The rupee depreciated sharply last week as it hit an all-time low of Rs 83 against the dollar.

Flows from FPIs have been inconsistent over the past few months as they keep changing their stance to keep track of the rapidly changing investment landscape.

The broader sentiment has been inappropriate, though there has been some intermittent relief.

“Expectations of further aggressive rate hikes by the US Fed, depreciating rupee, fears of recession and continuing conflict between Russia and Ukraine will continue to negatively impact foreign flows into Indian equities. This scenario has created an atmosphere of uncertainty. Leading investors to hedge risk,” Srivastava said.

In terms of sectors, FPIs have been the sellers in financials, FMCG and IT in October.

Apart from equities, foreign investors have pulled out Rs 1,950 crore from the debt market during the period under review.

Apart from India, FPI inflows have been negative for Thailand and Taiwan so far this month.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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