FPIs withdraw Rs 28200 crore from Indian equities on poll jitters, attractive Chinese market valuations: Due to uncertainty regarding the results of the general elections and attractive valuations in the Chinese markets, foreign investors i.e. FPI have withdrawn Rs 28,200 crore from the Indian stock market so far in May. According to depository data, foreign investors have withdrawn a net Rs 28,242 crore from shares this month till May 17. Apart from shares, FPIs invested Rs 178 crore in the bond market during this period.
Earlier in April, foreign investors had withdrawn a net Rs 8,700 crore from stocks in April amid concerns over changes in India’s tax treaty with Mauritius and rising bond yields in the US.FPIs had put in Rs 35,098 crore in shares during March this year and Rs 1,539 crore in February. During January 2024, foreign investors had withdrawn Rs 25,743 crore from shares. Overall, so far this year, foreign investors have withdrawn Rs 26,000 crore from the Indian stock markets.
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FPIs have put bonds in the market so far in May 178 crores
Apart from shares, this month till May 17, foreign investors have invested Rs 178 crore in the debt market i.e. bond market. 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. During this period, FPIs have invested Rs 45,000 crore in the bond market.
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What do experts say?
There may be a dramatic change in the equity inflows of FPIs in the coming days after the election results. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, believes that in the event of political stability, huge investment will come into the Indian market.
MojoPMS Chief Investment Officer Sunil Damania said that there are two main reasons for FPI selling in the current financial year. First, there is uncertainty regarding the election results. FPIs generally adopt safe options in case of uncertainty. Apart from this, the market sentiment is quite high due to which FPIs are selling.