General election Due to uncertainty over the results and attractive valuations in Chinese markets, foreign portfolio investors (FPIs) have withdrawn Rs 28,200 crore from Indian stock markets so far in May. FPIs had pulled out a net Rs 8,700 crore from stocks in April amid concerns over changes in India’s tax treaty with Mauritius and rising bond yields in the US. Earlier, FPIs had infused Rs 35,098 crore in shares in March and Rs 1,539 crore in February. Going forward, there may be a dramatic change in the equity flows of FPIs after the election results.
FPI withdrew Rs 28,242 crore
VK Vijayakumar, chief investment strategist, Geojit Financial Services, said that in the event of political stability, huge investment will come into the Indian market. According to depository data, foreign portfolio investors have pulled out a net Rs 28,242 crore from stocks this month till May 17. MojoPMS Chief Investment Officer Sunil Damania said that there are two main reasons for FPI selling in the current financial year. First, there is uncertainty regarding the election results. FPIs generally adopt a safe approach in case of uncertainty. Apart from this, market valuations are quite high due to which FPIs are selling.
put money in bond market
According to the data, FPIs have invested Rs 178 crore in 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 Overall, so far this year FPIs have withdrawn Rs 26,000 crore from shares. However, during this period he has injected Rs 45,000 crore into the bond market.
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