FPIs pull out ₹15,236 crore from equities in January as China reopens

Foreign portfolio investors have turned buyers in the last four trading sessions

Foreign investors pulled out a net amount of ₹15,236 crore this month so far on attractive Chinese markets and concerns about the U.S. economy entering a recession.

However, foreign portfolio investors (FPIs) have turned buyers in the last four trading sessions.

The outflow in the month of January came following a net inflow of ₹11,119 crore in December and ₹36,239 crore in November.

Overall, FPIs pulled out ₹1.21 lakh crore from the Indian equity markets in 2022 on aggressive rate hikes by the central banks globally, particularly the US Federal Reserve, volatile crude, rising commodity prices along with Russia and Ukraine conflict.

The year 2022 was the worst year for FPIs in terms of flow and withdrawal from equities comes following a net investment in the preceding three years.

According to the data with the depositories, FPIs have made a net withdrawal of ₹15,236 crore this month (till January 20). The latest FPI sell-off was largely driven by the aggressive reopening of the Chinese markets after the lockdown.

In accordance with its zero Covid policy, China had been enforcing rigorous lockdowns to reduce the number of Covid cases. As a result, Chinese markets fell, making them more appealing from a value standpoint, Himanshu Srivastava, Associate Director - Manager Research, Morningstar India, said.