Foreign Portfolio Investors: Foreign portfolio investors are constantly withdrawing money from the stock market. FPIs are selling ‘indiscriminately’ on the Indian stock market. In the first fortnight of May, FPIs pumped out Rs 25,200 crore from the Indian market. In the face of rising global interest rates and the rising cases of Covid-19, foreign investors are constantly withdrawing their investments from Indian stocks.
The ups and downs will continue
Kotak Securities chief Shrikant Chauhan said high crude oil prices, high inflation and tight economic policy have weighed on the stock market. Apart from this, investors are also worried about growth due to high inflation. We believe that the trend of FPIs will continue to be volatile in the near future.
Withdrawals from the last 7 months
Foreign portfolio investors have continued to withdraw money from the domestic market till April 2022. 1.65 lakh crore has been withdrawn from the stock market in the last seven months. Vijay Singhania, president of TradeSmart, is confident that FPI withdrawals will continue in the coming weeks. He said that at present, the share of FPIs in Indian stocks is at 19.5 per cent, the lowest level since March 2019.
Invested in the first week of April
In the first week of April, FPIs poured Rs 7,707 crore into the Indian market after selling for six consecutive months. However, their withdrawals resumed during the week of short trading sessions from 11 to 13 April. He has been a seller ever since.
Raised repo rates
Between May 2 and 13, FPIs withdrew about Rs 25,216 crore from equities, according to depository data. On May 4, the RBI had hiked the repo rate by 0.4 per cent to 4.4 per cent without any fixed schedule. In addition, the central bank has increased its cash reserve ratio (CRR) by 0.50 per cent. The US Federal Reserve has also raised interest rates by 0.50 per cent.
Interest rates could rise further
Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said investors now fear that interest rates may rise further in the future. As a result, foreign investors are withdrawing from the Indian market. In addition to stocks, FPIs have also withdrawn Rs 4,342 crore from the debt or bond market during the period.