FPIs pull out Rs 12,300 cr from equities in April as US Fed rate hike fears loom
Foreign portfolio investors (FPIs) continued to be net sellers for six months to March 2022, pulling out an enormous net amount of Rs 1.48 lakh crore from equities.
- Apr 24, 2022,
- Updated Apr 24, 2022 1:46 PM IST
Foreign investors have withdrawn nearly Rs 12,300 crore from the Indian equity market so far this month as fears of an aggressive rate hike by the US Federal Reserve continue to dent investor sentiments.
Moving forward, overseas flows into Indian equities could continue to be under duress owing to an approaching rate hike by the US Fed, unstable crude prices, weak quarterly results, uncertainty around the Russia-Ukraine war, and high domestic inflation numbers, according to experts.
Foreign portfolio investors (FPIs) continued to be net sellers for six months to March 2022, pulling out an enormous net amount of Rs 1.48 lakh crore from equities, PTI reported.
Also Read: FPIs pull out over Rs 4,500 cr from equities last week, turn net sellers again
These were largely on the back of anticipation of a rate hike by the US Federal Reserve and due to the deteriorating geopolitical environment following Russia's invasion of Ukraine.
After six months of selling spree, FPIs turned net investors in the first week of April and invested Rs 7,707 crore in equities.
After a short breather, once again they turned net sellers to the tune of over Rs 4,500 crore during the holiday-shortened April 11-13 week and the sell-off continued in the succeeding week too.
This makes foreign investors net sellers to the tune of Rs 12,286 crore in this month so far (April 1-22), data with depositories showed.
The sharp sell-off could be attributed to weak global cues after the US Federal Reserve Chairman Jerome Powell hinted at a 50 bps rate hike in May.
Also Read: FPI outflow crosses Rs 1-lakh crore mark in 2022
"The fears of an aggressive rate hike by the US Fed, continue to dent investor sentiments. This could have prompted investors to again adopt a cautious stance towards their investments in emerging markets like India," said Himanshu Srivastava, Associate Director - Manager Research, Morningstar India, told the news agency.
Manish Jeloka, Co-head Products & Solutions, Sanctum Wealth, said that its easy money is getting pulled back as central bankers have started pulling back excess liquidity amid risk-off scenarios due to geopolitical tensions.
He, further, said that rising interest rates in developed markets is usually accompanied by withdrawals from emerging markets.
Apart from equities, FPIs withdrew a net Rs 1,282 crore from the debt markets during the period under review.
According to Srivastava, there is nothing much at the moment which could cheer up foreign investors and coax them to invest in Indian equity markets.
Foreign investors have withdrawn nearly Rs 12,300 crore from the Indian equity market so far this month as fears of an aggressive rate hike by the US Federal Reserve continue to dent investor sentiments.
Moving forward, overseas flows into Indian equities could continue to be under duress owing to an approaching rate hike by the US Fed, unstable crude prices, weak quarterly results, uncertainty around the Russia-Ukraine war, and high domestic inflation numbers, according to experts.
Foreign portfolio investors (FPIs) continued to be net sellers for six months to March 2022, pulling out an enormous net amount of Rs 1.48 lakh crore from equities, PTI reported.
Also Read: FPIs pull out over Rs 4,500 cr from equities last week, turn net sellers again
These were largely on the back of anticipation of a rate hike by the US Federal Reserve and due to the deteriorating geopolitical environment following Russia's invasion of Ukraine.
After six months of selling spree, FPIs turned net investors in the first week of April and invested Rs 7,707 crore in equities.
After a short breather, once again they turned net sellers to the tune of over Rs 4,500 crore during the holiday-shortened April 11-13 week and the sell-off continued in the succeeding week too.
This makes foreign investors net sellers to the tune of Rs 12,286 crore in this month so far (April 1-22), data with depositories showed.
The sharp sell-off could be attributed to weak global cues after the US Federal Reserve Chairman Jerome Powell hinted at a 50 bps rate hike in May.
Also Read: FPI outflow crosses Rs 1-lakh crore mark in 2022
"The fears of an aggressive rate hike by the US Fed, continue to dent investor sentiments. This could have prompted investors to again adopt a cautious stance towards their investments in emerging markets like India," said Himanshu Srivastava, Associate Director - Manager Research, Morningstar India, told the news agency.
Manish Jeloka, Co-head Products & Solutions, Sanctum Wealth, said that its easy money is getting pulled back as central bankers have started pulling back excess liquidity amid risk-off scenarios due to geopolitical tensions.
He, further, said that rising interest rates in developed markets is usually accompanied by withdrawals from emerging markets.
Apart from equities, FPIs withdrew a net Rs 1,282 crore from the debt markets during the period under review.
According to Srivastava, there is nothing much at the moment which could cheer up foreign investors and coax them to invest in Indian equity markets.