Foreign portfolio investors FPIs: Foreign portfolio investors (FPIs) have withdrawn Rs 17,537 crore from the Indian market in just three trading sessions of March. The main reason for this is believed to be the uncertainty created due to the Russia-Ukraine conflict and the rise in crude oil prices, which has hit the sentiments of investors.
According to data from depositories, foreign investors have pulled out Rs 14,271 crore from equities, Rs 2,808 crore from debt segment and Rs 9 crore from hybrid instruments between March 2-4. In this way, foreign investors have withdrawn a total of Rs 17,537 crore from the Indian markets in just three days.
Market sentiment has got a setback
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The uncertainty arising out of the war between Ukraine and Russia and the rise in crude oil prices has affected the market sentiment.”
Apart from this, FPI debt segment is selling in view of weakness in rupee against dollar.
Geopolitical tension is negative for foreign investment
Himanshu Srivastava, Associate Director- Manager Research, Morningstar India, said that the creation of geopolitical tension on this scale does not bode well for an emerging market like India from the point of view of the flow of foreign investment.
He said the high valuations of Indian equity markets coupled with earnings risks associated with companies and slowing economic growth have acted to prevent foreign investors from investing freely in the Indian stock market.
Foreign investment in other emerging markets increased
Shrikant Chauhan, Head Equity Research (Retail), Kotak Securities Ltd. said, “FPI inflows in emerging markets except India were positive in the month of February. Indonesia $122 million, Philippines $141 million, South Korea $418 million And FPI investment of $1931 million came in Thailand.”
FPI flows will continue to fluctuate
He said FPI flows are expected to remain volatile in the coming times due to Russia’s attack on Ukraine and its subsequent sanctions, as well as rising inflation and a hike in policy interest rates by the Federal Reserve.
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