Of the total withdrawal, over Rs 4,700 crore was withdrawn in the last week alone.
As the US economy is facing high interest rates, fear of recession and a high valuation of domestic stocks, foreign portfolio investors (FPI) have withdrawn more than Rs 10,000 crore from Indian stock markets in the first three weeks of September 2023. Before the outflow, FPIs had been constantly buying equities in the Indian market for the past six months from March to August. This had brought around Rs 1.74 lakh into the market.
As per the data from the depositories, it has been found that in the 15 trading days so far in September, FPIs have sold the equities in 11 days with a net withdrawal of Rs 10,164 crore.
According to Himanshu Srivastava, Associate Director, Manager Research, Morningstar India, “FPI flows have displayed a subdued pattern over the past few weeks. This hesitancy among investors can be attributed to growing apprehensions about inflation and the interest rate landscape, particularly in the US, coupled with uncertainties regarding global economic growth.”
Read More: Mukesh Ambani’s Viacom18 signs deal with Rs 1.03 lakh crore firm for lavish Mumbai office, rent is…
As a result, foreign investors have become cautious and have adopted a wait-and-watch approach when planning to invest in the emerging Indian market.
From the total pullout of Rs 10,164 crore that has happened this month until September 22, over Rs 4,700 crore was withdrawn in the last week alone. It has also been reported that the latest outflow came after FPI investment in equities suffered a four-month low of Rs 12,262 crore in August.
But the FPIs have also invested around Rs 295 crore in India’s debt market during the period under review. This has taken the total investments by FPIs in equities to Rs 1.25 lakh crore and close to Rs 28,476 crore in the debt market this year so far.
As per the sectoral data from September 15, the highest outflows were registered by mining, power, services, oil, and telecommunication sectors, while sectors like financial services, capital foods, consumer services, IT, and realty had major investments.
As per the market analysts, global trends, the activities of foreign institutional investors (FIIs), and Brent crude oil prices will play an important role in deciding the direction of the stock markets this week. The stock market also saw a decline of about 3 per cent last week.
