FPIs withdrew ₹25,586 crore from Indian equities in May due to election uncertainty and Chinese appeal

From The Hindu: 2024-06-02 02:14:00

Foreign Portfolio Investors (FPIs) withdrew a massive ₹25,586 crore from Indian equities in May, driven by uncertainty around the general election outcome and Chinese markets’ outperformance. Additionally, FPIs made a net investment of ₹35,098 crore in March and ₹1,539 crore in February. The trend may change post-election results and with U.S. interest rate movements.

The high valuations and weak earnings in sectors like financials and IT, coupled with political uncertainties and the appeal of Chinese markets, led to FPI selling in Indian equities. The outperformance of Chinese stocks and spike in U.S. bond yields triggered the selling. However, robust GDP growth and political stability may create a positive outlook for the Indian economy.

Market experts see a positive long-term outlook for FPI flows into Indian debt, driven by India’s inclusion in global bond indices. While FPIs have withdrawn ₹23,364 crore from equities in 2024 so far, they invested ₹53,669 crore in the debt market. The short-term flows are impacted by global economic uncertainty and volatility, but the overall sentiment remains positive.



Read more at The Hindu: FPIs take out ₹25,586 crore from equities in May on poll jitters, attractive valuations in China