Foreign investors have turned net sellers this month withdrawing Rs 4,375 crore (both equity and debt) from Indian capital markets. Foreign portfolio investors (FPIs) withdrew a net sum of Rs 2,048 crore from equities and Rs 2,309.86 crore from the debt market during May 2-24, taking the total net outflow to Rs 4,375.86 crore, according to latest data from depositories.
This is the first month after January 2019 when FPIs have turned net sellers in the market. In January, FPIs pulled out Rs 5,360.97 crore from Indian market.
However, they infused a net amount of Rs 16,093 crore in April, Rs 45,981 crore in March and Rs 11,182 crore in February in the capital markets (both equity and debt).
"However, it is noteworthy that foreign investors pumped in money on the day of election results as the mandate became clear," said Vidya Bala, Head - Mutual Funds Research at FundsIndia.
On May 23, FPIs infused a net Rs 1,352.20 crore into equities on May 23, when PM Narendra Modi-led BJP scored a thumping victory in the Lok Sabha General Election 2019.
On the same day, Sensex crossed 40,000 mark for the first time ever and Nifty breached the 12,000 level, a new record high for the index.
Meanwhile, Sensex has added 403 points or 1.03% since the beginning of this month. Nifty too has added 0.81% or 96 points since April 30.
"While FPIs may remain cautiously optimistic on what the government will deliver in a second term, neglected cyclical segments from banks to capital goods to infrastructure-related plays may see increased interest from institutional investors," Bala added.
Kaustubh Belapurkar, Director - Manager Research, Morningstar Investment Adviser India, said, "The exit poll indications followed by the actual emphatic BJP victory has certainly enthused foreign investors. With a strong government at the Centre, we expect FPIs will be watching India more keenly amongst the emerging markets pack."
Edited by Aseem Thapliyal
With PTI inputs