Investors are pulling out amid geopolitical tensions and the possibility of a rate hike by the US Federal Reserve
Investors are pulling out amid geopolitical tensions and the possibility of a rate hike by the US Federal Reserve
Foreign portfolio investors (FPIs) pulled out a net ₹18,856 crore from Indian markets so far in February, amid geopolitical tensions and the prospect of a rate hike by the US Federal Reserve.
According to depository data, foreign investors pulled out ₹15,342 crore from equities and ₹3,629 crore from the bond market between February 1-18. Also, he invested Rs 115 crore in hybrid devices.
This translated into a net outflow of ₹18,856 crore during the period under review.
This is the fifth consecutive month of foreign fund outflows.
“Geopolitical tensions and the prospect of a rate hike by the US Fed has triggered an outflow from FPIs from the Indian equity markets in recent days. They added selling momentum after the US Fed signaled the end of the ultra-loose monetary policy regime. has grown rapidly,” said Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.
Shrikant Chauhan, head-equity research (retail), Kotak Securities, said rising tensions between the US and Russia over Ukraine pushed investors into defensive zones and safe havens such as bonds and gold.
“The net outflow of FPIs from Indian equities in the last one year is close to USD 8 billion. This figure is the highest since 2009. FIIs have sold around Rs 17,500 crore in February so far. India’s FPI outlook is this That India has already considered earnings.16-18 per cent CAGR growth for FY23 and FY24 based on earnings and economic growth cycle expectations…
Rajesh Bhatia said, “Yet these estimates do not account for risks of rising cost of capital in the US (India’s cost of capital is tied to US cost of capital) and therefore PE contractionary potential, nor inflation risk earnings growth.” hurting estimates.” , MD & CIO, ITI Long Short Equity Fund.
VK Vijayakumar, chief investment strategist, Geojit Financial Services, said, “Unless market corrections make valuations attractive, FPIs can be expected to sell more.
He said that domestic institutional investors and HNIs are gradually accumulating high quality financials, whose valuations have become attractive due to continuous selling of FPIs.
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