Overseas investors have pulled out a total of Rs 45,608 crore from domestic markets this month so far, which could make March the sixth consecutive month of selling by FPIs.
Foreign portfolio investors (FPIs) fear India would be hit more by commodity price hikes, particularly in crude, since India is a major importer, said V K Vijayakumar, chief investment strategist, Geojit Financial Services.
According to depositories data, FPIs pulled out Rs 41,168 crore from equities, Rs 4,431 crore from the debt segment and Rs 9 crore from hybrid instruments, taking the total net outflow between March 2-11 to Rs 45,608 crore.
This will be the sixth consecutive month of FPI outflows from Indian markets.
The selling is mainly confined to financials and IT since these segments constitute the bulk of assets under the custody of FPIs, Vijayakumar noted.
The geopolitical crisis has also moved market flows and shifted sentiment from risk-on to risk-off, resulting in withdrawals from most emerging market economies, he pointed out.
Shrikant Chouhan, head—equity research (retail) at Kotak Securities, said other than Thailand, all other emerging markets have witnessed outflows till date in March.
“Taiwan, South Korea, Indonesia and Philippines witnessed FPI outflows to the tune of $7,089 million, $2,665 million, $426 million and $26 million, respectively. On the other hand Thailand witnessed inflows of $102 million,” he said. witH PTI