NEW DELHI: The exodus of FPIs from Indian equity markets continues unabated. In January so far, they withdrew Rs 64,156 crore ($ 7.44 billion).
The development came amid depreciation of the rupee, rise in the US bond yields and expectation of a tepid earning season.
According to the data with the depositories, FPIs made an investment of Rs 15,446 crore in the entire December. The shift in sentiment comes amid global and domestic headwinds.
Experts believe that the higher valuation of Indian equities, despite recent corrections, expectation of a rather tepid earning season and macroeconomic headwinds are making investors wary.
According to the data, Foreign Portfolio Investors (FPIs) offloaded shares worth Rs 64,156 crore from Indian equities so far this month (till January 24). FPIs have been sellers on all days this month except January 2.
The data said that the financial segment has been bearing the brunt of FPI selling as the bulk of their assets under management is in this sector.
On the other hand, IT witnessed some buying in the wake of improved prospects for the sector and the positive management commentary.
The overall trend indicates a cautious approach by foreign investors, who scaled back investments in Indian equities significantly in 2024, with net inflows of just Rs 427 crore.
Notably, since US bond yields are attractive, FPIs have been sellers in the debt market, too. They withdrew Rs 4,399 crore from debt general limit and Rs 5,124 crore debt voluntary retention route.
In 2023, extraordinary Rs 1.71 trillion net inflows were made by the FPIs, driven by optimism over India’s strong economic fundamentals.
2022 saw a net outflow of Rs 1.21 trillion amid aggressive rate hikes by global central banks.
Agencies