Withdrawal of 25200 crores so far in the month of May.
High crude oil prices, high inflation, tight monetary stance have affected the stock markets. Apart from this, investors are also worried about growth amid high level of inflation.
foreign portfolio investors ,Foreign Portfolio InvestorsThe process of indiscriminate selling continues in the Indian stock markets. In the first fortnight of May, FPIs hit the Indian markets (Share Market Investment25200 crore has been withdrawn from it. Foreign investors are continuously withdrawing their investments from Indian stocks amid increasing interest rates globally and increasing cases of Kovid-19. Shrikant Chauhan, Head of Equity Research (Retail), Kotak Securities said, “High crude oil prices, high inflation, tight monetary stance have affected the stock markets. Apart from this, investors are also worried about growth amid high level of inflation. We believe that the trend of FPIs will remain volatile in the near future as well.
Foreign portfolio investors were sellers for seven consecutive months till April 2022 and pulled out Rs 1.65 lakh crore from Indian stocks. TradeSmart Chairman Vijay Singhania believes that FPI withdrawals will continue in the coming weeks as well. He said that at present, the share of FPIs in Indian stocks has come down to 19.5 percent, which is the lowest level since March, 2019.
FPIs invested in the first week of April
After selling for six consecutive months, in the first week of April, FPIs had injected Rs 7,707 crore into the Indian markets. However, after that their withdrawals resumed during the week of short trading sessions from April 11 to 13. Since then he has been a constant seller. According to depository data, during May 2 to 13, FPIs have withdrawn about Rs 25,216 crore from shares.
Repo rate has been increased by 0.4%
On May 4, the Reserve Bank had increased the repo rate by 0.4 percent to 4.4 percent without any fixed schedule. Along with this, the central bank had increased the cash reserve ratio (CRR) by 0.50 percent. The US central bank has also increased interest rates by 0.50 percent.
Has also withdrawn from the bond market
Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said, “Investors are now apprehensive that interest rates may increase further going forward. Because of this, foreign investors are withdrawing from the Indian markets. Apart from stocks, FPIs have also pulled out Rs 4,342 crore from the bond market during this period.