HomeLifestyleWhy foreign investors were disillusioned with Indian markets, withdrew Rs 6,000 crore...

Why foreign investors were disillusioned with Indian markets, withdrew Rs 6,000 crore so far in October

Highlights

FPIs pulled out a total of Rs 5,992 crore from the market so far this month.
Last year, foreign investors pulled out Rs 7,600 crore from the domestic market.
Until the dollar weakens, FPIs will not buy strongly here.

New Delhi. Foreign investors have withdrawn about Rs 6,000 crore from Indian stock markets so far this month. The depreciation of the rupee against the US dollar has strengthened this withdrawal. With this, Foreign Institutional Investors (FPIs) have so far withdrawn a total of Rs 1.75 lakh crore in the calendar year of 2022.

Shrikant Chauhan, Head of Equity Research (Retail) at Kotak Securities, said that in the coming times too, FPI activities are seen to be full of volatility. He said FPI exits may continue on expectations of continuing geopolitical risks, higher inflation levels and a rise in bond yields. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “FPIs are unlikely to sell much in the near term but will return to buyer positions only after the dollar weakens. So the FPI’s stance will depend on US inflationary trends and the monetary outlook of the Federal Reserve.”

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Strong support from domestic investors
According to depository data, FPIs have so far withdrawn Rs 5,992 crore from the Indian market in October. Of course, in the last few days, there has been a slight decline in the volume of their withdrawals. Market analysts believe that despite selling of FPIs, domestic institutional investors and retail investors continued to be buyers, giving strength to the stock markets. Vijaykumar said, “If FPIs want to buy the shares sold earlier in today’s time, then they will have to pay the inflated price.” This realization is also working to check the selling of FPIs even in the negative environment.

Which stocks sell the most
In September, FPIs had withdrawn about Rs 7,600 crore from the Indian markets. The fall in the rupee against the dollar and the firm stance of the US Federal Reserve had led to selling among FPIs. Kanika Aggarwal, co-founder of Upside AI, said, “The strengthening of the dollar, rather than any India-related risk, has been the main reason for this withdrawal of foreign investors.” Last week, the rupee reached below 83 rupees against the dollar, which is its lowest level ever. FPIs have sold especially in the finance, FMCG and IT sectors. Apart from equity markets, foreign investors have also withdrawn Rs 1,950 crore from the debt market in October.

Market cap of 8 out of 10 companies increased
Out of the top 10 Sensex companies, the market cap of 8 companies has increased by Rs 2,03,335.28 crore. Reliance Industries has benefited the most in this. Reliance’s market cap has increased by Rs 68,296.41 crore to Rs 16,72,365.60 crore. It is followed by SBI (Rs 30,120.57 crore) and ICICI Bank (Rs 25,946.89 crore).

Tags: business news in hindi, FPI, Share market, stock market

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