FPI: Foreign investors’ confidence down, Rs 35,506 crore withdrawn from Indian markets in February so far

Foreign Portfolio Investors (FPIs) have withdrawn Rs 35,506 crore from the Indian markets in February. This is the fifth consecutive month that FPIs have been a seller in the Indian market.

FPIs are continuously withdrawing from Indian markets since October 2021
FPIs have been withdrawing from the Indian markets continuously since October 2021. FPI outflows in February 2022 have been the highest since March 2020. At that time, FPIs had withdrawn Rs 1,18,203 crore from the Indian markets.

According to depository data, FPIs have withdrawn Rs 31,158 crore from equity and Rs 4,467 crore from debt segment during February 1 to 25. During this, he has invested 120 crores in hybrid instruments.

FPIs taking a cautious approach due to Russia-Ukraine tension
Himanshu Srivastava, Associate Director (Manager Research), Morningstar India said, “FPI outflows have picked up after the US central bank announced withdrawal of stimulus measures and late interest rate hikes. Apart from this, due to Russia-Ukraine tension, FPIs are taking a cautious approach and staying away from emerging markets like India.

FPIs can make further withdrawals
Shrikant Chauhan, Head of Equity Research (Retail), Kotak Securities said that the trend of FPIs would be determined by the trend of rupee against the dollar, crude oil prices, yield on bonds in the US. In the US, FPIs prefer to invest in the bond market when the returns on 10-year bonds increase. At present, all these things are affecting FPIs. In such a situation, FPIs can make further withdrawals.