NEW DELHI: Foreign Portfolio Investors (FPIs) withdrew Rs 44,396 crore from Indian equities this month, primarily due to rising dollar's, increasing US bond yields, and anticipated weak earnings. Earlier, they pulled out over Rs 15,400 crore in December, as per depository data. FPIs have maintained a selling position throughout this month, except for January 2.
"The continued depreciation in Indian rupee is exerting significant pressure on foreign investors leading them to pull the money out of the Indian equity markets," Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Advisers India, said.
He further said that the higher valuation of Indian equities despite recent adjustments, anticipated weak earnings period and unclear economic growth trajectory are additional concerns for investors.
According to records, Foreign Portfolio Investors (FPIs) have sold shares worth Rs 44,396 crore from Indian equities until January 17.
"The principal reasons for the sustained FPIs selling are the strength of the dollar and the rising bond yields in the US. With the dollar index above 109 and the 10-year US bond yield above 4.6 per cent, it is logical for FPIs to sell in emerging markets, particularly in the most expensive emerging market India," V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.
Meanwhile, FPIs have also reduced their debt market holdings due to attractive US bond yields. They removed Rs 4,848 crore from debt general limit and Rs 6,176 crore from debt voluntary retention route.
Vipul Bhowar, Senior Director - Listed Investments, Waterfield Advisors, said that improved corporate earnings, robust GDP growth supported by domestic consumption and increased infrastructure spending by the government could trigger a reversal in FPI flows to India.
Stay informed with the latest Business News on Times of India. Explore the list of Bank Holidays, stay informed about Budget 2025, discover the new Income Tax Slabs, and use the Income Tax Calculator for hassle-free tax planning.
Unlock Investment Potential: Enroll in ET's Stock Valuation Workshop - Batch 3. Secure Your Spot Now!
The TOI Business Desk is a vigilant and dedicated team of journal...
Read MoreThe TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.
Read Less
Start a Conversation
Post comment