Foreign portfolio investors (FPI) continue selling in Indian stock markets. Due to the imposition of a new tariff on Canada, Mexico and China from the US, there has been tension about global trade. Due to this, foreign investors have withdrawn more than Rs 7,300 crore from Indian stock markets in the first week of February. Earlier in January, FPI had withdrawn Rs 78,027 crore from Indian markets. According to depository data, in December 2024, FPI invested Rs 15,446 crore in Indian markets.
Experts believe that the market’s sentiment will later be determined by global macroeconomic developments, domestic policy measures and currency fluctuations. According to the data, FPI has withdrawn Rs 7,342 crore from Indian shares till 7 February this month.
FPI is avoiding risking risk
According to PTI, Morningstar Investment Research India Associate Director-Manager Research Himanshu Srivastava says that a major reason for Sailing of FPI is a stress arising about global trade. The US has imposed a new tariff on Canada, Mexico and China, which has increased the possibility of trade war. He said that due to this uncertainty, global investors have opted not to take risks. Due to this, they are withdrawing money from emerging markets like India.
Srivastava said that the Indian rupee has also come down to 87 per dollar for the first time. Weak rupee reduces the return of foreign investors and Indian assets remain less attractive for them.
The strength of the dollar index and high yield on American bonds is also the reason
According to Vijaykumar, the Chief Investment Strategist V K. Vijaykumar, the Chief Investment Strategist of Jiojit Financial Services, “the dollar is forcing the index and the high yield FPI to sell on the American bonds.” FPI is expected to reduce selling in the future as the dollar index and the American bond yield are now showing softening trend. ”
He said that BJP’s victory in Delhi assembly elections will have a positive impact in the short term. However, the market will depend on a long -term trend, economic growth and improvement in income of companies. Also, after the budget announcements and the RBI cut in the repo rate, the sentiment in the Indian market will gradually improve.
Purchase in date market
So far in the month of February, the FPI date or bond market has been a pure buyer. In the first week, he has invested Rs 1,215 crore under the General Limit in Bond and Rs 277 crore from the Volunteer Retention Route.
In 2024, FPI made a net investment of just Rs 427 crore in Indian shares. Earlier in 2023, he made a net investment of Rs 1.71 lakh crore in the Indian market. In 2022, FPI did a net withdrawal of Rs 1.21 lakh crore.