FPI: Earlier in December, FPIs had invested Rs 15,446 crore in the Indian stock market. Due to various kinds of obstacles on the domestic and global front, the attitude of foreign investors has changed.
Due to the strong dollar, rising US bond yields, and concerns about companies’ poor quarterly results, foreign portfolio investors (FPIs) have pulled out of the Indian stock market to the tune of Rs 44,396 crore so far this month.
Details gleaned from depository data
This information was obtained from the depository’s records. FPIs made investments in the Indian stock market totaling Rs 15,446 crore earlier in December. Foreign investors’ mindset has shifted as a result of numerous challenges both domestically and internationally. The data shows that as of this month (through January 17), foreign portfolio investors had taken out a total of Rs 44,396 crore from Indian shares. This month, FPIs have been sellers every day but January 2.
The Views of Morningstar Investment Advisors
“Foreign investors have been under a lot of pressure due to the ongoing decline in the Indian rupee,” stated Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Advisors India. They are pulling their capital out of the Indian market because of this. Aside from this, he claimed that investors are being impacted by the high valuation of Indian companies, the potential for poor quarterly results, and the uncertainty about the rate of economic development, even in light of the recent fall.
The Perspective of Geojit Financial Services
The strength of the dollar and the increase in US bond yields are the primary causes of FPIs’ ongoing selling, according to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The yield on US 10-year notes is over 4.6 percent, and the dollar index is above 109. It makes sense for FPIs to sell in emerging countries under such circumstances, particularly India, which is the most costly of these markets.
In America, bond yields are appealing.
FPIs are also selling in the debt or bond market since US bond yields are still appealing. They have taken out Rs 6,176 crore via the voluntary retention route and Rs 4,848 crore under the general limit in the bond market.
With a net investment of just Rs 427 crore in Indian stocks in 2024, this trend generally illustrates the cautious approach taken by foreign investors. FPIs invested Rs 1.71 lakh billion in Indian stocks earlier in 2023. FPIs pulled Rs 1.21 lakh crore out of the Indian market in 2022 as a result of aggressive rate hikes by central banks around the world.
