foreign portfolio The process of selling by investors (FPIs) continues in the Indian stock market. So far this month, FPIs have withdrawn Rs 85,790 crore or $ 10.2 billion from the Indian market. Due to China's stimulus measures, attractive valuations of shares there and high valuations of domestic shares, FPIs are continuously selling in the Indian market. The month of October is proving to be the worst in terms of withdrawal of foreign funds. In March 2020, FPIs had pulled out Rs 61,973 crore from stocks. Earlier in September, FPIs had invested Rs 57,724 crore in the Indian stock market, which is the highest level of their investment in nine months.
For this reason foreign investors are withdrawing money
According to depository data, foreign portfolio investors had been consistent buyers since June. They had definitely withdrawn Rs 34,252 crore in April-May. Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, said future FPI investment in the Indian market will depend on global developments such as geopolitical situation and interest rate fluctuations. He said that on the domestic front, FPI will keep an eye on the inflation trend, quarterly results of companies and demand for the festive season. According to the data, FPIs have withdrawn a net Rs 85,790 crore from the Indian stock market between October 1 and 25. Continued selling by FPIs has impacted market sentiment, pushing NSE's Nifty down eight per cent from its peak.
Fear of continuation of selling
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said the continued selling trend of FPIs is unlikely to change immediately. Due to China's incentive measures, FPIs are turning to the market there. Apart from this, FPIs remain sellers due to high valuations in India. According to the data, FPIs have withdrawn Rs 5,008 crore from bonds through general limit and Rs 410 crore through voluntary retention route (VRR) during the period under review. Invested Rs crore. So far this year, FPIs have invested Rs 14,820 crore in shares and Rs 1.05 lakh crore in the debt or bond market.
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