FPIs Pull Out Rs 14,000 Crore from Indian Equities in June

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FPIs Pull Out Rs 14,000 Crore from Indian Equities in June
14 Jun 2022
min read

News Synopsis

Wary of the global and domestic scenarios, foreign investors have continued to withdraw from the Indian stock market, withdrawing nearly Rs 14,000 crore so far this month. As a result, the net outflow of foreign portfolio investors (FPI) from equities in 2022 has so far reached Rs 1.81 lakh, as shown by custodian data.

Vinod Nair, Head of Research at Geojit Financial Services said FPI sales could continue in the short term but are expected to weaken in the medium term. According to the data, foreign investors withdrew a net amount of Rs 13,888 crore from stocks during June 1-10. FPIs have been continuously withdrawing funds from Indian stocks since October 2021.

In addition, RBI also raised its repo rate by 50 basis points and raised its inflation forecast. Central banks expect inflation to continue to exceed 6% for three-quarters, putting pressure on bond yields. These factors have kept foreign investors on the road to the open, he added.

In terms of risk and compensation, and given rising US interest rates, Indian debt may not offer attractive investment options for foreign investors, said Morningstar India's Associate Director and Manager of Research, Himanshu Srivastava.

With the exception of India, all other emerging markets, including Taiwan, South Korea, Thailand, and the Philippines, have seen outflows so far this month.

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