Foreign portfolio investors (FPIs) pulled out huge amounts 28,243 crore US Fed from Indian equities in January indicated an increase in interest rates.
According to depository data, FPIs pulled out 28,243 crore from equity between January 3-28.
During the same period, he pumped 2,210 crore in the debt segment and 1,696 crore in hybrid devices.
total net outflow remained at 24,337 crores.
With the latest withdrawal from the Indian markets, FPIs have become net sellers for the fourth consecutive month.
Himanshu Srivastava, Associate Director – Manager Research, Morningstar India said, “With the US Fed indicating that it will soon start raising interest rates and reducing its bond holdings, FPIs go on a selling spree in Indian equity markets. went.”
This signals the end of the ultra-lax monetary policy regime.
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “FPIs are booking profits in IT, where they are sitting on huge profits after huge appreciation in the last two years.”
He said the sale of FPIs has brought down the share prices of financials, especially of major banks.
Besides, bond yields have risen globally in recent days on hopes of a hike in interest rates by the US Fed, prompting investors to cut back on riskier assets and look for safe havens such as gold, Srivastava said. inspired to move on.
Investing in the Indian debt market could result in FPIs parking their investments from a short-term perspective given their cautious approach towards Indian equities.
Shrikant Chauhan said that other emerging markets like South Korea, Taiwan and Philippines saw negative inflows of USD 2.77 billion, USD 2.5 billion and USD 56 million respectively, while Thailand and Indonesia saw USD 442 million and USD 418 million respectively. The US dollar flowed. , Head – Equity Research (Retail), Kotak Securities.
Chouhan said the central bank’s determination to curb high inflation and the Fed’s asset launch following a hike in borrowing costs will continue to remain volatile in equity markets.
Besides, rising crude oil prices and inflation are expected to keep FPI inflows into emerging markets volatile.
Additionally, investors’ attention will be on the upcoming Union Budget and state elections in India, he said.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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