Foreign Portfolio Investors (FPI) It has withdrawn more than Rs 17,000 crore from the Indian stock markets in the first 10 days of the current month of May. Earlier in the month of April, due to changes in India’s tax treaty with Mauritius and increase in bond yields in America, FPIs had made a net withdrawal of Rs 8,700 crore from stocks. In this way, in the first 10 days of the current month, FPIs have withdrawn more than April. Earlier, FPIs had made a net investment of Rs 35,098 crore in shares in March and Rs 1,539 crore in February.
Why are you withdrawing money from Indian market?
Market experts say that amid uncertainty over the results of the general elections, foreign investors are withdrawing from Indian stock markets due to high valuations and reaping profits. Tradejini Chief Operating Officer (COO) Trivesh D said that FPIs can adopt a cautious approach till the election results are clear, but in case of favorable results and political stability, they can make big investments in Indian markets. It is believed that after the general elections, due to the strong financial results of Indian companies, FPIs will increase investment in the Indian market.
Small investors need to be cautious
According to depository data, foreign portfolio investors have pulled out Rs 17,083 crore from stocks so far this month (till May 10). Himanshu Srivastava, associate director-manager research at Morningstar Investment Research India, said there are several reasons for the aggressive selling by FPIs. FPIs are being cautious due to uncertainty regarding the results of the general elections. They are hesitant in coming to the market before the election results. If this trend continues further, we may see a bigger decline in the market. In such a situation, small investors need to remain alert.
Withdrawal from debt and bonds also
Apart from shares, FPIs have also withdrawn Rs 1,602 crore from the debt or bond market during the period under review. Earlier, FPIs had invested Rs 13,602 crore in the bond market in March, Rs 22,419 crore in February and Rs 19,836 crore in January. Overall, so far in 2024, FPIs have withdrawn Rs 14,860 crore from shares. However, they have infused Rs 14,307 crore into the debt or bond market.
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