Foreign investors have become cautious amid uncertainty regarding the results of the ongoing Lok Sabha elections in India.In the first 10 days of May, foreign investors withdrew Rs 17,000 crore from Indian equities, that is, during this period they sold a large number of shares. So far in May, foreign investors have withdrawn Rs 1,602 crore from the bond market i.e. debt market.
Foreign investors sold shares worth Rs 17,083 crore in the first 10 days of May
According to depository data, foreign portfolio investors have withdrawn Rs 17,083 crore from shares so far this month till May 10. Amidst the uncertainty regarding the results of the general elections, foreign investors are withdrawing from the Indian stock markets due to high valuations and profit booking. Earlier last April, due to changes in India’s tax treaty with Mauritius and increase in bond yields in America, FPIs had made a net withdrawal of Rs 8,700 crore from stocks. In this way, in the first 10 days of the current month itself, FPIs have withdrawn more than April. Earlier, FPI had made a net investment of Rs 35,098 crore in shares in March and Rs 1,539 crore in February. this year In January, foreign investors had withdrawn Rs 25,743 crore from shares. Overall, so far in 2024, FPIs have withdrawn Rs 14,860 crore from shares.
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FPI has also withdrawn Rs 1602 crore from the bond market so far in May.
Apart from shares, FPIs have also withdrawn Rs 1,602 crore from the debt market i.e. bond market till May 10 this month. Earlier, FPI had invested Rs 13,602 crore in the bond market in March, Rs 22,419 crore in February and Rs 19,836 crore in January. Overall this year, foreign investors have invested Rs 14,307 crore in the bond market.
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What do experts think?
It is believed that after the general elections, due to the strong financial results of Indian companies, FPIs will increase investment in the Indian market. Tradejini Chief Operating Officer (COO) Trivesh D said that FPIs can adopt a cautious approach till the election results are clear, but in case of favorable results and political stability, they can make big investments in Indian markets.
Himanshu Srivastava, associate director-manager research at Morningstar Investment Research India, said, “There are many reasons for the aggressive selling by FPIs. FPIs are being cautious due to uncertainty regarding the results of the general elections. They are hesitant in coming to the market before the election results.
