FPIs Pull Out Rs 2,415 Crore From Domestic Markets In January So Far
Indian two thousand and five hundred rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

FPIs Pull Out Rs 2,415 Crore From Domestic Markets In January So Far

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Adopting a cautious approach amid the U.S.-Iran tensions, foreign portfolio investors have pulled out a net sum of Rs 2,415 crore from the Indian capital markets in January so far.

As per latest depositories data, FPIs invested a net amount of Rs 777 crore in equities and pulled out Rs 3,192.7 crore from the debt segment between Jan. 1-10. This translates into a cumulative net outflow of Rs 2,415.7 crore.

Overseas investors have turned net sellers in January after remaining buyers for four consecutive months since September 2019.

Also read: Seven Of Top-10 Companies Add Rs 32,020 Crore In Market Capitalisation; HDFC Bank, RIL Lead

"Cautiousness among foreign investors was apparent as they closely watched the developments on the global front before investing in the Indian equity markets. Geopolitical turmoil triggered by increased tension between U.S. and Iran played a key role in the way equity markets behaved globally," said Himanshu Srivastava, senior analyst manager research at Morningstar Investment Adviser India.

However, both the U.S. and Iran have shown their intentions to de-escalate military tensions. This may result in the rebuilding of risk-on sentiment which may be positive for foreign flows into Indian equity markets going ahead, he added.

Additionally, FPIs have the Budget announcements in their sights.

We can expect the government to make announcements to boost the economy, including infrastructure spending. FPI investment into India will pick up in a bigger way following budgetary announcements aimed at improving the economy.
Harsh Jain, Co-Founder and COO, Groww.

Also read: Weekly Wrap: Rupee’s Best Week In 10 Months, Sensex Swings On Iran Tensions, GDP Estimates

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