FPIs net sellers of Indian equities worth Rs 4,444 cr in May so far


Foreign investors pulled Rs 4,444 crore from Indian stock markets in May so far in the wake of concerns over the second wave of the COVID-19 pandemic and its likely impact on the Indian economy.

Foreign Portfolio Investors (FPIs) withdrew Rs 6,370 crore from equities but infused Rs 1,926 crore in the debt segment between May 1-21, as per depositories data, taking the overall net outflow to Rs 4,444 crore. The total net outflow from the Indian capital markets was at Rs 9,435 crore in April.

Meanwhile, the indications of betterment in the COVID-19 situation over the last two weeks have provided some relief and have led to a steep reduction in net outflow numbers, Himanshu Srivastava, associate director – manager research, Morningstar India told PTI.

“The concern over the second wave of the coronavirus pandemic and its possible impact on the Indian economy continue to keep foreign investors on the sidelines and restrain them from investing substantially into the Indian equity markets,” he said.

Shrikant Chouhan, executive vice president, equity technical research at Kotak Securities Ltd, noted that concerns about rising inflation and rising debt levels are keeping emerging markets suppressed.

“Amongst emerging markets South Korea and Taiwan saw highest month-to-date FPI outflows of $825 crore and $344 crore respectively. On the contrary, Indonesia saw month-to-date FPI inflows of $4.6 crore,” Chouhan said.    

FPI outflows is a temporary phenomenon as per Harsh Jain, co-founder and COO at Groww.  

The number of covid cases in the country is falling and vaccination rates are slowly climbing; and as the economy reopens, FPI investments will “dramatically climb,” he said.