Foreign investors have almost pulled out money in the first half of October this year. 7,500 crore from the Indian stock market on concerns of tightening monetary policy by the US Federal Reserve and other central banks globally, which could hamper global economic growth.
Apart from equities, foreign investors have also pulled out 2,079 crore from the debt market during the period under review. NSDL data revealed that FPI outflow stood at 1.76 lakh crore so far in 2022.
Between October 3 and 14, foreign investors pulled up 7,458 crores. FPI inflows have been negative for the Philippines, Taiwan and Thailand so far this month.
It came after the outflow of the over 7,600 crore in September on the harsh stance of the US Fed and sharp depreciation of the rupee.
in August, FPI made its biggest purchase of the current year with the inflow of 51,204 crores. Foreign investors remained net buyers in the first two months (July and August) of Q2 FY23.
FPI set record between January and June 2,17,358 crore from the equity market. Currently, the year witnessed the highest sales with outflows in June 50,203 crores.
According to Himanshu Srivastava, Associate Director- Manager Research, Morningstar India, the latest pullout by FPIs was largely driven by concerns of tightening monetary policy by the US Federal Bank and other central banks globally.
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said the key trigger for FPI sell-offs is a sustained “growth in the dollar and expects the dollar to remain strong in the current global macro build-up”.
Further, he observed that there is a significant trend in FPI sales, with sales being in financial and IT which form the largest share of FPI holdings. He added that FPIs are also selling in oil and gas and metals as these segments will also be affected by the global economic slowdown.
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