Foreign portfolio investors (FPIs) were net sellers in the Indian markets 8,879 crore in December so far.
According to the depository’s data, he pulled out 7,462 crore from equity, 1,272 crore from the debt segment and 145 crore from hybrid devices during December 1-10.
This made the total net outflow 8,879 crore during this period.
In November, FPIs were net sellers 2,521 crore in the Indian markets.
Morningstar India Associate Director (Manager Research) Himanshu Srivastava said concerns remain over the highly permeable Omicron variant of the coronavirus, which has impacted the global growth outlook and could play a bad game.
This has already turned investors away from risk.
Adding to this, Shrikant Chauhan, Head-Equity Research (Retail) at Kotak Securities, said inflation is expected to pick up and monetary tightening by the US Federal Reserve is expected.
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said banking has witnessed continuous sell-off in which FPIs account for the largest share. He has also been a vendor in Information Technology (IT).
“Paradoxically, banking and IT are the two segments that have good earnings,” he said.
He said that if the market remains soft then the selling momentum may slow down.
For the debt segment, Srivastava said inflows are largely driven by the direction of the US dollar and US Treasury yields.
“The jump in US Treasury yields this week could also trigger some outflow from the Indian bond market,” he said.
Chouhan said that in December so far, inflows to emerging markets have been mixed, with South Korea, Taiwan and Indonesia seeing inflows of USD 2,164 million, USD 1,538 million and USD 265 million respectively.
On the other hand, Thailand and the Philippines saw an outflow of USD 161 million and USD 81 million respectively.
“FPI inflows are expected to remain volatile in future considering the upcoming state elections and interest rate hike expected. Investors will also focus on the upcoming quarterly results,” Chouhan said.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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