FPI Investment in May : Due to uncertainty over the results of the Lok Sabha elections and the better performance of the Chinese markets, foreign portfolio investors (FPIs) have made a massive withdrawal of Rs 22,000 crore from Indian stocks so far this month. Earlier, FPIs had withdrawn more than Rs 8,700 crore from stocks in April amid concerns over changes in India’s tax treaty with Mauritius and the continued rise in bond yields in the US. At the same time, FPIs had made a net investment of Rs 35,098 crore in stocks in March and Rs 1,539 crore in February.
Buying will increase when the election results become clear
Going forward, as things become clear on the election front, FPI buying in the Indian market will increase. VK Vijaykumar, Chief Investment Strategist, Geojit Financial Services, says that the process of FPI buying may start even before the election results. According to the depository data, foreign portfolio investors (FPIs) have withdrawn a net Rs 22,047 crore from shares this month (till May 24). He said, “The reason for the heavy selling by FPIs is the better performance of the Chinese stock market.”
FPIs are selling due to general elections
He said that apart from this, FPIs are also selling due to the general elections in India. Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said, “Amid the uncertainty about the results of the general elections, foreign investors are refraining from entering the Indian stock markets at this time. They are waiting for the election results for this.” During the period under review, FPIs have invested Rs 2,009 crore in the debt or bond market. 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 Overall, this year FPIs have withdrawn Rs 19,824 crore from shares. During this period, they have invested Rs 46,917 crore in the bond market.
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