Market continues to fall due to ‘indiscriminate’ selling of FPIs, so far Rs 25,200 crore has been withdrawn in May

Foreign Portfolio Investors: Foreign portfolio investors are continuously withdrawing money from the stock market. FPIs are selling ‘indiscriminately’ from the Indian stock markets. In the first fortnight of May, FPIs have withdrawn Rs 25,200 crore from the Indian markets. Foreign investors are continuously withdrawing their investments from Indian stocks amid increasing interest rates globally and increasing cases of Kovid-19.

will continue to fluctuate
Kotak Securities Head Shrikant Chauhan said that high crude oil prices, high inflation, tight monetary stance have affected the stock markets. Apart from this, investors are also worried about growth amid high level of inflation. We believe that the trend of FPIs will remain volatile in the near future as well.

Withdrawing money from last 7 months
Foreign portfolio investors have continuously withdrawn money from the domestic market till April 2022. In the last 7 months, Rs 1.65 lakh crore has been withdrawn from the stock market. TradeSmart Chairman Vijay Singhania believes that FPI withdrawals will continue in the coming weeks as well. He said that at present, the share of FPIs in Indian stocks has come down to 19.5 percent, which is the lowest level since March, 2019.

Invested in first week of April
After selling for 6 consecutive months, in the first week of April, FPIs had poured Rs 7,707 crore into the Indian markets. However, after that their withdrawals resumed during the week of short trading sessions from April 11 to 13. Since then he has been a constant seller.

Repo rates hiked
According to depository data, during May 2 to 13, FPIs have withdrawn about Rs 25,216 crore from equities. On May 4, the Reserve Bank had increased the repo rate by 0.4 percent to 4.4 percent without any fixed schedule. Along with this, the central bank had increased the cash reserve ratio (CRR) by 0.50 percent. The US central bank has also increased interest rates by 0.50 percent.

There may be further increase in interest rates
Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said that investors are now apprehensive that there may be a further increase in interest rates going forward. Because of this, foreign investors are withdrawing from the Indian markets. Apart from stocks, FPIs have also pulled out Rs 4,342 crore from the loan or bond market during this period.

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