Record selling of foreign investors this year, withdrawal of more than one lakh crore from Indian markets, know why?


Mumbai . Foreign portfolio investors (FPIs) have withdrawn Rs 1,14,855.97 crore from the Indian markets so far this year. Foreign investors continue to be sellers in the Indian markets amid concerns over geo-political tensions and inflation.

According to depository data, FPIs have withdrawn Rs 48,261.65 crore from Indian stock markets so far this month. In this way, till date, the figure of foreign investor withdrawal in 2022 has reached Rs 1,14,855.97 crore.

Selling for the sixth consecutive month
Experts say that due to the macroeconomic situation and inflationary pressure at the global level due to Russia-Ukraine tension, foreign investors are withdrawing from the Indian markets. This is the sixth consecutive month that foreign investors have made net withdrawals from the Indian stock markets.

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Russo-Ukraine War
Shibani Kurian, Senior EVP and Head (Equity Research), Kotak Mahindra Asset Management Company, said, “The direct impact of the Russia-Ukraine war on the Indian economy is very limited, as we do not depend on imports from these countries. However, high commodity prices are creating challenges.

crude oil headache
Kurien said that India is a net importer of crude oil. “It is estimated that a 10 per cent jump in crude oil prices will impact the current account deficit (CAD) by 0.3 per cent, CPI-based inflation by 0.4 per cent and gross domestic product (GDP) by 0.2 per cent.

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According to depository data, FPIs pulled out Rs 28,526.30 crore from Indian stock exchanges in January. His withdrawal in February was Rs 38,068.02 crore. So far in March, he has sold Rs 48,261.65 crore.

Regarding the future direction of the market, analysts say that despite the uncertainty, the market is showing belligerent potential. However, the weakness in global sentiment could have an impact here as well. Vinod Nair, Head of Research, Geojit Financial Services said, “The domestic market will be guided by global developments. With the end of the war and increased supply of crude oil, India can maintain its combat capability. However, volatility will be a matter of concern in the short term.

Tags: FPI, Market, Share market, Stock Markets, stock return


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