Will foreign investors leave the stock market in ruins? Withdraw so many thousand crores in July so far
Highlights
- FPIs pulled out Rs 2.25 lakh crore from Indian stock markets so far this year
- Withdrawals by FPIs much higher than the 2008 economic downturn
- FPIs pulled out Rs 50,203 crore from Indian equities in June
Stcok Market News: Looking at the way foreign investors are withdrawing money from the Indian stock market, it seems that they will die by ruining the Stcok market! Foreign portfolio investors (FPIs) have pulled out more than Rs 7,400 crore from the stock markets so far this month. Earlier in June, FPIs had pulled out Rs 50,203 crore from Indian equities. At the same time, so far this year, FPIs have withdrawn Rs 2.25 lakh crore from the Indian stock markets, which is a record level. Withdrawals by foreign investors are much higher than the 2008 economic downturn.
Fears of recession scare FPIs
Experts say that fears of a recession in the US and continued strengthening of the dollar have made FPIs sellers. Earlier in June, FPIs had pulled out Rs 50,203 crore from Indian equities. Himanshu Srivastava, Associate Director-Manager Research, Morning Star India said, although the selling momentum of FPIs has slowed, things have not changed much. So this is not an indication of a change in their stance. Foreign investors have remained a seller in the Indian stock market for the last nine consecutive months.
Still don’t expect the situation to get better
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “With the uncertainty around the foreign exchange market and the continued strengthening of the dollar, it is unlikely that FPIs will aggressively buy in the Indian market. At higher levels they can again become sellers. Kotak Securities Head Equity Research (Retail) Shrikant Chauhan said that going forward, FPI inflows will remain volatile.
2.25 lakh crore withdrawal so far this year
FPIs will continue to be sellers in emerging markets due to geopolitical risks, rising inflation and tightening of monetary stance by central banks. According to depository data, FPIs pulled out a net Rs 7,432 crore from Indian markets during July 1-15. In June, FPIs sold shares worth Rs 50,203 crore. This is the highest level since March 2020. At that time, FPIs had sold shares worth Rs 61,973 crore. So far this year, FPIs have withdrawn Rs 2.25 lakh crore from the Indian stock markets, which is a record level. Earlier in the year 2008, he had sold shares worth Rs 52,987 crore. Apart from this, FPIs have pulled out Rs 879 crore from the debt or bond market during the period under review.
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