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FPI pulled out 40,000 crores from Indian stock markets in May, how will be the trend of investors going forward? – News

FPI: The withdrawal of foreign portfolio investors (FPIs) from the Indian markets continued for the eighth consecutive month in May. Foreign investors are selling amid fears of a rate hike by the US central bank. FPIs have withdrawn about Rs 40,000 crore from the Indian stock markets in May. According to depository data, in this way FPIs have sold shares worth Rs 1.69 lakh crore so far in 2022.

According to the data, FPIs have withdrawn a total of Rs 39,993 crore from the stock markets in May. A major reason for the weakness in the Indian markets is the withdrawal of FPIs.

What will be the trend of investors going forward?

  • Shrikant Chauhan, Head Equity Research (Retail), Kotak Securities believes that due to geo-political tensions, high inflation, tightening of monetary stance by central banks, FPI inflows are going to be volatile going forward.
  • Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said that the main reason for the sell-off of FPIs in recent times is the fear of more aggressive rate hike by the US central bank. The Federal Reserve has increased policy rates twice this year to control rising inflation.
  • Manoj Purohit, Partner and Leader (Financial Services Tax), BDO India, said, “Furthermore, FPIs are confused amid concerns over the Russia-Ukraine war. Due to the war, the price of crude oil is rising globally. Foreign investors are selling in sensitive markets due to hike in policy rates by US central bank, tightening of monetary stance by central banks globally and hike in foreign exchange dollar rate.

2.07 crore withdrawn in 8 months

In the eight months from October, 2021 to May, 2022, FPIs have withdrawn Rs 2.07 lakh crore from the Indian stock markets. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, however, said that now the selling momentum of FPIs has slowed down. In the early days of June, their selling has been very less. He said that selling of FPIs may stop if yields on dollar and US bonds stabilize.

(Input-PTI)

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