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FPI: Foreign portfolio investors (FPIs) have withdrawn Rs 44,396 crore from the Indian stock market so far this month amid the strengthening of the dollar, rising bond yields in the US and fears of weak quarterly results of companies. .
Information obtained from depository data
This information has been obtained from depository data. Earlier in December, FPIs had invested Rs 15,446 crore in the Indian stock market. Due to various obstacles on the domestic and global front, there has been a change in the attitude of foreign investors. According to the data, foreign portfolio investors have withdrawn a net Rs 44,396 crore from Indian stocks so far this month (till January 17). FPIs have been selling on all days of this month except January 2.
Opinions of Morningstar Investment Advisors
Himanshu Srivastava, associate director-manager research, Morningstar Investment Advisors India, said,"The continuous decline in the Indian rupee has put a lot of pressure on foreign investors. This is the reason why they are withdrawing their investments from the Indian market." He said that apart from this, despite the recent fall, high valuations of Indian shares, possibility of weak quarterly results, uncertainty about the pace of economic growth are affecting investors.
Jeojit Financial Services Opinion
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said, "The main reasons for the continuous selling by FPIs are the strengthening of the dollar and the rise in bond yields in America. The dollar index is above 109 and the yield on 10-year US bonds is more than 4.6 percent. In such a situation, it is logical for FPIs to sell in emerging markets, especially the most expensive emerging market India."
Bond yields in US attractive
Since bond yields in America remain attractive, FPIs are also selling in the debt or bond markets. They have withdrawn Rs 4,848 crore under the general limit in the bond market and Rs 6,176 crore through the voluntary retention route.
Overall, this trend reflects the cautious attitude of foreign investors, who made a net investment of only Rs 427 crore in Indian stocks in 2024. Earlier in 2023, FPI investment in Indian shares was Rs 1.71 lakh crore. FPIs had withdrawn Rs 1.21 lakh crore from the Indian market amid aggressive rate hike by global central banks in 2022.
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