Amidst India-Canada issue, foreigners withdrew Rs 10,000 crore from India, this is the reason - Newztezz Online

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Sunday, September 24, 2023

Amidst India-Canada issue, foreigners withdrew Rs 10,000 crore from India, this is the reason

FPI Investment in India: On one hand, the India-Canada dispute does not seem to be stopping. On the other hand, investors are scared of rising interest rates and recession in America. Due to this nervousness, they are withdrawing their investments from the market and putting them in safe haven.

The India-Canada issue doesn't seem to be stopping. Its effect has now started becoming visible on the economy as well. Apart from the Canada dispute, there has been increased concern among foreign investors due to reasons like increase in interest rates in America and fear of recession. Due to this, foreign investors have withdrawn more than Rs 10,000 crore from the Indian stock market in September.

Whereas before this, during March to August, foreign investors had invested Rs 1.74 lakh crore in the Indian market. This investment was made in the last 6 months by buying shares of foreign investors.

Why are foreign investors withdrawing money?

Market experts believe that the market valuation is still high. On top of this, due to high interest rates in America, fear of recession and now India- Canada dispute, investors are putting money in safe haven. According to Geojit Financial Services analyst VK Vijayakumar, market valuations are still high and bond yields in the US (4.49 percent for 10 years) remain attractive. Because of this, foreign investors are withdrawing money from the market.

What do the statistics say?

According to government data, foreign portfolio investors i.e. FPI have sold on 11 out of 15 trading days of this month. During this period, he has withdrawn Rs 10,164 crore from the Indian market. Whereas in the month of August, the flow of foreign investors in the Indian market has come down to Rs 12,262 crore. This flow of foreign investors is the lowest level in four months. So have foreign investors become disillusioned with the Indian market? Investment of Rs 1.25 lakh crore made this year

According to Himanshu Srivastava, Associate Director Research, Morningstar India, the flow of investment from foreign investors has been slow for the last few weeks. In fact, the main reason behind their concern is the concern about inflation and especially about the interest rate scenario in America and global economic growth. There is uncertainty. According to government data, FPIs have put in Rs 295 crore in the load or bond market during this period. Thus, in the current calendar year so far, FPI investment in shares has been Rs 1.25 lakh crore. At the same time, he has invested more than Rs 28,476 crore in the bond market.

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