According to the data, FPIs pulled out a net Rs 50,203 crore from equities in June. This month has seen the highest withdrawal since March 2020.
FPI: The process of withdrawal of foreign portfolio investors (FPIs) from the Indian markets continued for the ninth consecutive month in June. In June, FPIs sold shares worth a net Rs 50,203 crore. This figure is the highest in the last two years. FPIs continue to be sellers due to aggressive stance by the US central bank, high inflation and high valuations of domestic equities.
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How will be the trend of investors going forward?
- Analysts say that FPI withdrawals may continue for now. Shrikant Chauhan, Head Equity Resources (Retail), Kotak Securities said, “Going forward, we believe inflation will determine the FPI’s stance. Apart from this, the difference in yield on bonds and shares has also been consistently narrow. Even FPIs are withdrawing from this.
- Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said, “FPIs continue to be sellers in the Indian stock markets due to aggressive interest rate hike by the Federal Reserve, high inflation and high valuations of stocks.”
- Srivastava said that the sentiment regarding India remains negative, due to which the FPI’s stance on the domestic stock markets remains cautious. In June, FPIs remained sellers in other emerging markets such as Indonesia, Philippines, South Korea, Taiwan and Thailand.
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This month has the highest withdrawal in the last two years
According to the data, foreign portfolio investors pulled out a net Rs 50,203 crore from equities in June. This is the highest figure for his withdrawal since March 2020. At that time, FPIs had withdrawn Rs 61,973 crore from Indian shares. According to depository data, FPIs have withdrawn Rs 2.2 lakh crore from Indian stock markets in the first 6 months of 2022. Earlier in the year 2008, FPIs had withdrawn Rs 52,987 crore from the stock exchanges.
(Input-PTI)
