Foreign portfolio investors (FPIs) have remained sellers in July so far, however, the outflow of money into the equity market is slowing compared to the previous month. More than two weeks have passed in the current month, and FPI outflows have not even crossed 10,000 crores – which brings in the hope that there may eventually be a revival in outflow of foreign funds into the stock market in the near term. FPIs have remained net sellers since early 2022 due to turmoil in macroeconomic activities.
From 1-15 July, FPI Equity market remained on outflow 7,432 crore as per NSDL data. It shows exhaustion of outflow of foreign funds as compared to the sale of 31,430 crore in equity market Recorded from 1-18 June.
Overall in June Rs 50,203 crore pulled out of equity market – highest monthly outflow in 2022.
During the period April-June 2020, the outflow of FPI is in line with 1,07,340 crore in Indian equities. In the first half of 2022 (January-June), the outflow is approx. 2,17,358 crore from the market.
So far this year, FPIs have pulled out a whopping Rs 2,24,790 crore – which is almost 95% of the total outflow in the overall Indian market. Outflow of foreign funds is approx. 2,36,672 crore in the Indian market including Equity, Debt, Debt-VRR and Hybrid.
On Friday, the Sensex closed 53,760.78 points or 0.65% higher at 53,760.78. The Nifty 50 closed 110.55 points or 0.69% higher at 16,049.20.
Vinod Nair, Head of Research, Geojit Financial Services, said, “Volatility has re-emerged and investors have turned their attention to the upcoming Fed policy in the backdrop of rising US inflation. The fall in crude oil prices and moderation in FII sales has led to a resurgence of interest in the upcoming Fed policy. Added to the domestic optimism. Disappointing IT results in the market, depreciating rupee, and fears of a global slowdown are largely restricting the move. Besides Fed policy, the near-term momentum of the domestic market will be impacted by the current quarter earnings. “
Currently, FPIs keep a close watch on the Indian rupee which does not rest from its depreciation against the US dollar. The local unit has reached near the 80 mark.
The rupee weakened for the eleventh consecutive week and closed at 79.8775 against the dollar on Friday as investors waited for the Fed’s meeting on fears of a global slowdown. Earlier in the day, the local currency had touched a record low of 79.96. The rupee has hit an all-time low for the fifth consecutive session.
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