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FPI withdrawal continues for the seventh consecutive month from the share market, so many thousand crores withdrawn in April

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FPI

Highlights

  • FPIs pulled out Rs 17,144 crore from Indian markets in April
  • This is less than March’s net withdrawal figure of Rs 41,123 crore.
  • The hike in interest rates by the US Fed affected investor sentiment

Share Market Withdrawals by foreign portfolio investors (FPIs) continued for the seventh consecutive month in April. FPIs pulled out Rs 17,144 crore from Indian stock markets in April amid fears of an aggressive rate hike by the US central bank. Apart from this, volatility in sentiment will continue in the near future, say experts. The sentiment will remain subdued due to higher interest rates and higher crude oil prices due to aggressive rates globally.

1.65 lakh crore withdrawn in seven months

Foreign portfolio investors have been net sellers for seven months till April and have pulled out a huge amount of Rs 1.65 lakh crore from equities. The main reason for this is the fear of aggressive rate hike by the US central bank and the geopolitical crisis that arose after Russia’s attack on Ukraine. After six months of continuous selling, FPIs were net buyers in the first week of April with investments of Rs 7,707 crore. But after that, during the week of low trading sessions i.e. 11 to 13 April, they sold again. His sell-off continued in the weeks that followed.

Withdrawals much lower than in March

According to depository data, FPIs pulled out Rs 17,144 crore from Indian markets in April. However, this is lower than the March net withdrawal figure of Rs 41,123 crore. US Federal Reserve Chairman Jerome Powell has indicated a half percent increase in interest rates in May. This is one of the major reasons why FPIs are withdrawing from the Indian markets. Kotak Securities Head – Equity Research (Retail) Shrikant Chauhan said, FPIs remained net sellers in April. The main reason for this is the fear of aggressively increasing interest rates by the Federal Reserve.

US Fed impacts investor sentiment

Himanshu Srivastava, associate director-manager research at Morningstar India, said, “Anxiety of aggressive interest rate hike by the US central bank has affected investor sentiment. Because of this, investors are avoiding taking risks and they are adopting a ‘watch and wait’ policy of investing in emerging markets like India. According to Vijay Singhania, Chairman, TradeSmart, the main reason for the exit of FPIs from the stock markets in April is the high rate of inflation. Apart from equities, FPIs also pulled out a net Rs 4,439 crore from the debt or bond market during the period under review. Apart from India, in April, FPIs also pulled out from emerging markets like Taiwan, South Korea and the Philippines.

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Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.
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