Foreign Portfolio Investors (FPIs) have switched to net sellers this month, taking out more than Rs 13,400 crore from Indian stocks as of the beginning of August. This reversal comes after several months of rising investment.
Earlier this year, foreign portfolio investors (FPIs) invested a total of Rs 22,134 crore in Indian stocks. On the other hand, according to current data, there was a net withdrawal of Rs 13,431 crore between August 1 and August 9. This was mostly due to fears about the US recession and the unwinding of the yen carry trade.
FPIs had invested a substantial amount of net money in July roughly Rs 32,365 crore fueled by hopes for sustained economic expansion and profitable returns. This comes after a gain in the market and political calm in June, which contributed to Rs 26,565 crore. Due to political unpredictability and worries over tax treaties, foreign portfolio investors withdrew approximately Rs 8,700 crore in April and Rs 25,586 crore in May before these inflows.
The Bank of Japan’s recent interest rate increase to 0.25% and growing recession fears in the United States are blamed for the current outflows. Selling was also influenced by high valuations in Indian markets and geopolitical tensions, mainly between Iran and Israel.
FPIs have made investments in the Indian debt market of Rs 97,249 crore for 2024 after investing Rs 6,261 crore thus far this month. During the two weeks that concluded on July 31, FPIs kept up their sales in the financial services industry while actively purchasing IT, cars, capital goods, and metals.
Market movements and investor mood are still impacted by the continuous uncertainty surrounding interest rate policy and U.S. economic prospects.
