Foreign Portfolio Investors (FPIs) They have become net sellers once again. They are withdrawing their money from the Indian market. So far in the month of August, more than Rs 13,400 crore has been withdrawn from the Indian equity market. That is, such a huge sell-off has been done in just 7 trading days. Let us tell you that foreign portfolio investors (FPIs) investing in the Indian market in the last two months have now become net sellers. Depository data shows that so far this year, FPIs have made a net investment of Rs 22,134 crore in the Indian equity market.
Why are you withdrawing money
FPIs have made this withdrawal amid the closure of yen carry trade and fears of recession in the US. Vijaykumar said that withdrawals in August have been made due to the closure of yen carry trade after the Bank of Japan raised interest rates by 0.25 percent and fears of recession in the US. Himanshu Srivastava, co-director and research manager, Morningstar Investment Research India, said that this increased further due to increasing geopolitical tensions, especially the growing conflict between Israel and Iran. Due to this also foreign investors reduced their risk. Apart from this, foreign investors were motivated to book profits in view of the high valuation of Indian markets. Srivastava said that factors such as weak employment data, growing fears of recession in the US and uncertainty about the timing of interest rate cuts also led to withdrawal from the Indian market.
Selling likely to continue
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that in case the market remains bullish in the future, foreign investors may sell more. This is because the valuation of the Indian equity market remains comparatively high. According to the data, foreign investors have withdrawn so far in the month of August. Earlier in July, FPI investment of Rs 32,365 crore came due to the expectation of strong economic growth, continuation of reforms and better than expected company results. In June also, due to political stability and sharp rise in the markets, net investment of Rs 26,565 crore came.
Money was withdrawn from India in May also
However, earlier in May, FPIs had withdrawn Rs 25,586 crore due to election shocks and in April, more than Rs 8,700 crore due to concerns over changes in India’s tax treaty with Mauritius and the continued rise in US bond yields. FPIs were continuously selling financial services stocks in the fortnight ended July 31. However, during this period they bought information technology (IT), automobile, capital products and metals. On the other hand, FPIs have invested Rs 6,261 crore in the debt market so far in August. With this, this figure has reached Rs 97,249 crore in the year 2024.
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