FPIs turn cautious, pull out ₹13,000 crore from Indian stocks in January
The Hindu
Foreign investors have adopted a cautious approach this month, offloading domestic equities worth ₹13,000 crore in the first three weeks
Foreign investors have adopted a cautious approach this month, offloading domestic equities worth ₹13,000 crore in the first three weeks owing to high valuations of Indian stocks and surging U.S. bond yields.
In contrast, foreign investors are bullish on the debt market and injected ₹15,647 crore in the debt market during the period under review, data with the depositories showed.
According to the data, foreign portfolio investors (FPIs) made a net withdrawal of ₹13,047 crore in Indian equities this month (till January 19).
They pulled out over ₹24,000 crore from equities during January 17-19. Before this, FPIs made a net investment of ₹66,134 crore in December and Rs 9,000 crore in November.
"There are two main reasons why FPIs turned sellers. One, the US bond yield started rising with the 10-year yield rising from the recent level of 3.9% to 4.15% triggering capital outflows from emerging markets," V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
"Second, since the valuations in India are high, FPIs used the excuse of less-than-expected results from HDFC Bank to press massive sales too," he added.
The extensive selling by FPIs could be attributed to offloading their stake in HDFC Bank given its disappointing quarterly results, Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India said.
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