Foreign portfolio investors (FPIs) have pulled out a net Rs 14,935 crore from the Indian market in the first half of February. FPIs are net sellers for the fourth consecutive month. The total net outflow during February 1-11 stood at Rs 14,935 crore. According to depository data, FPIs pulled out Rs 10,080 crore from equities, Rs 4,830 crore from debt segment and Rs 24 crore from hybrid instruments.
“FPIs accelerated selling momentum after the US Federal Reserve signaled the end of the hyper-lax monetary policy regime. Further, globally, said Himanshu Srivastava, Associate Director (Manager Research), Morningstar India. Bond yields have risen in recent days on expectations of an interest rate hike by the US Fed.” With US inflation hitting a 40-year high, he said, thanks to an aggressive rate hike by the US Fed in the coming months. The platform has been set, which can trigger further foreign outflows from Indian equities.
Shrikant Chauhan, Head of Equity Research (Retail) at Kotak Securities said that inflows into emerging markets have been mixed so far in the month of February 2022. Thailand, Indonesia, South Korea and the Philippines reported positive inflows of USD 1,155 million, USD 580 million, USD 477 million and USD 133 million respectively.
Taiwan, on the other hand, reported negative inflows of USD 410 million, he said. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “FPI selling is likely to continue in the coming days, in light of the weakness in global markets and the over two per cent rise in US 10-year bond yields.” ,
He said selling of FPIs in financials, especially high quality banking stocks, has made their valuations attractive.
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