According to the data, FPIs have withdrawn Rs 2.13 lakh crore in 2022 so far.
FPI: Foreign investors continue to withdraw from the Indian equity markets. FPIs have pulled out around Rs 46,000 crore so far this month after the Reserve Bank of India (RBI) and the US Federal Reserve tightened monetary policy. Federal Reserve’s policies, crude oil prices and rupee’s volatility have affected the attitude of foreign portfolio investors (FPIs). According to the data, FPIs have withdrawn Rs 2.13 lakh crore in 2022 so far.
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What is the opinion of experts
Hitesh Jain, Lead Analyst, Institutional Equity at Yes Securities, said monetary tightening by the US Federal Reserve and other major central banks, rising crude oil prices and volatile rupee amid speculation that FPIs will stay away from emerging markets. He said that FPI inflows will resume only when the rate hike by the Federal Reserve in the US stops.
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Withdrawals happening continuously since October 2021
Besides, if the current trend of dollar and bond yields continues, FPIs are likely to sell more, said VK Vijayakumar, chief investment strategist, Geojit Financial Services. According to the data, foreign investors made a net withdrawal of Rs 45,841 crore from equities in June (till 24th). Foreign investors have been continuously withdrawing money from Indian equities since October 2021. Such withdrawals were last seen in the first quarter of 2020, when the pandemic was accelerating.