Amid skyrocketing coronavirus cases Foreign portfolio investors (FPI) continued to exist the net sellers in the Indian market they took the advantage of surging markets by providing profit booking opportunity and as a whole, they pulled out Rs 9,015 crore from equities and debt securities.
As per the depositories data, Foreign portfolio investors withdrew Rs 2,957 crore from the debt segment and Rs 6,058 crore from equities between July 1-17. However, the net pulled out from the Indian markets during the period under review stood at Rs 9,015 crore.
This withdrawal is an outcome of the investment of Rs 24,053 crore made by the Foreign Portfolio Investors within the domestic markets in the month of June.
“The surge in the domestic markets has been providing profit booking opportunities. Besides, many states have also been implementing revised lockdown measures in order to curb increasing coronavirus cases, thus ventilating concerns that growth in the domestic economy could be pushed further ahead.” The associate director – manager research of Morningstar India Himanshu Srivastava, commented.
Rusmik Oza the executive vice president and head of the fundamental research at Kotak Securities said “most of the emerging markets with the exception of South Korea observed FPI outpouring this week.”
“As the earnings season proceeds further higher volatility and turnover could be seen in Indian markets. This tied with peak valuations could lead to some sort of profit-booking by FPIs,” Oza further said.
According to Himanshu Srivastava, “worldwide the situation is changing and there are several other factors which are deciding the direction of foreign flows and outflows. In India, the challenges related to the increasing coronavirus cases and economic revival continues and that will further continue to be discouraging for the foreign investors.” He further added the Indian financial markets will continue to see a rotational trend in terms of foreign flows.
Short bouts of inflows and outflows are also expected by FPIs in the Indian domestic and financial markets as per their changing opinions on the global trends.