November sees steepest FPI outflows since June 2013
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November sees steepest FPI outflows since June 2013

Foreign investors have pulled out funds from capital markets due to fears of rate hike by the US Federal Reserve in December, uncertainty over US ties with emerging markets post Donald Trump's victory, and concerns over the impact of demonetisation on economic growth and corporate earnings.

  • December 5, 2016  
  • |  
  • UPDATED   16:06 IST
November sees steepest FPI outflows since June 2013

Foreign portfolio investors (FPIs)/ foreign institutional investors (FIIs) withdrew funds amounting to Rs 37,340 crore in November 2016. Data from CMIE shows that these were the steepest outflows witnessed since June 2013 when they withdrew Rs 41,872 crore. FPIs had withdrawn Rs 12,140 crore from the capital markets in October 2016.

Foreign investors have pulled out funds from capital markets due to fears of rate hike by the US Federal Reserve in December, uncertainty over US ties with emerging markets post Donald Trump's victory, and concerns over the impact of demonetisation on economic growth and corporate earnings.

Net outflows from equity markets amounted to Rs 17,740 crore. FPIs purchased equity shares amounting to Rs 1.13 lakh crore and sold shares worth Rs 1.31 lakh crore. FPIs were net sellers of equity for 17 out of the 21 trading days during the month.

FPIs withdrew funds from both the equity and debt markets in November 2016. Debt markets witnessed net outflows to the tune of Rs 19,603 crore in November 2016. This was also the highest withdrawal seen since June 2013. FPIs purchased debt instruments worth Rs 29,275 crore and sold debt amounting to Rs 48,878 crore.

Mutual fund investments in capital markets slowed in November 2016. They fell by 25.6 per cent to Rs 25,110 crore as compared to the preceding month. This was largely because of a decline in mutual fund investments in debt. They dropped by 53.3 per cent. Investments in equity rose by 49.1 per cent to touch an all-time high of Rs 13,610 crore. Equity purchases amounted to Rs 42,920 crore while sales amounted to Rs 29,310 crore.