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FPIs pull out Rs 6,834 crore from Indian markets in February so far

FPIs pull out Rs 6,834 crore from Indian markets in February so far

FPIs have withdrawn Rs 3,627 crore from equities, Rs 3,173 crore from debt and Rs 34 crore from hybrid instruments.

Previously, FPIs have been net sellers for fourth consecutive months. Previously, FPIs have been net sellers for fourth consecutive months.

Overseas investors have been net sellers in the Indian markets so far in February, with foreign portfolio investors (FPIs) pulling out Rs 6,834 crore in the first four trading sessions.

FPIs have withdrawn Rs 3,627 crore from equities, Rs 3,173 crore from debt segment and Rs 34 crore from hybrid instruments in February so far, according to depositories' data.

Previously, FPIs have been net sellers for fourth consecutive months.

Commenting on this, Himanshu Srivastava, associate director - manager research at Morningstar India, told newsagency PTI that FPIs have sharply increased the selling pace after the US Fed announcement last week in which it indicated an end of the ultra-loose monetary policy regime.

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Bond yield have also surged globally in recent times on expectation of a hike in interest rates by the US Fed which has made investors risk averse, prompting them to cut exposure in riskier assets and move towards safe havens such as gold, he added.

"On the domestic front, the pro-growth Budget did manage to check the exodus of funds to some extent. However, the wider effect of Budget on foreign flows would be clear in the coming weeks," Srivastava added.

Despite the recent correction in stock market, Indian equities continue to trade at elevated levels. Keeping the current global backdrop in mind, foreign institutional investors (FIIs) have been moving out to the markets which have rich valuations and investing in the ones offering relatively attractive valuation and better risk-reward, Srivastava said.

Meanwhile, V K Vijayakumar, chief investment strategist at Geojit Financial Services, said that while FPIs sold heavily in banks and ITs, they bought metal stocks.

On outlook for FPI investment, Shrikant Chouhan, head of equity research (Retail) at Kotak Securities, said that equity markets are expected to remain volatile, given the high inflation and Fed's expected interest rate hike in the coming month. 

"...with higher inflation and rising bond yields, FPI flows in India are likely to remain volatile," Chouhan added.

(With PTI inputs)

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Published on: Feb 06, 2022, 5:01 PM IST
Posted by: Vinay Rai, Feb 06, 2022, 4:54 PM IST