Amid the strength of the dollar, rise in bond yields in the US and fears of weak quarterly results of companies, foreign portfolio investors (FPIs) have withdrawn Rs 44,396 crore from the indian stock market so far this month.
Information received from depository data
This information has been received from depository data. Earlier in December, FPIs had invested Rs 15,446 crore in the indian stock market. Due to various obstacles on the domestic and global front, the attitude of foreign investors has changed. According to the data, foreign portfolio investors have withdrawn a net Rs 44,396 crore from indian shares so far this month (till january 17). FPIs have been sellers on all days of this month except january 2.
Opinion of Morningstar Investment Advisors
Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Advisors India, said, "The continuous decline in the indian rupee has put a lot of pressure on foreign investors. This is the reason why they are withdrawing their investments from the indian market." He said that apart from this, the high valuation of indian stocks despite the recent decline, the possibility of weak quarterly results, uncertainty about the pace of economic growth are affecting investors.
Opinion of Geojit Financial Services
VK Vijaykumar, Chief Investment Strategist, Geojit Financial Services, said, "The main reason for the continuous selling by FPIs is the strength of the dollar and the rise in bond yields in the US. The dollar index is above 109 and the yield on 10-year US bonds is more than 4.6 percent. In such a situation, it is logical for FPIs to sell in emerging markets, especially in the most expensive emerging market India."
Bond yield attractive in America
Since the bond yield in America remains attractive, FPIs are also selling in the debt or bond market. They have withdrawn Rs 4,848 crore under the general limit in the bond market and Rs 6,176 crore through the voluntary retention route. Overall, this trend reflects the cautious stance of foreign investors, who made a net investment of only Rs 427 crore in indian stocks in 2024. Earlier in 2023, FPIs' investment in indian stocks was Rs 1.71 lakh crore. In 2022, FPIs withdrew Rs 1.21 lakh crore from the indian market amid aggressive rate hikes by global central banks.
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