Foreign investors put back gear, withdraw money from stock market and invest here

Foreign portfolio investors (FPIs) have withdrawn Rs 24,700 crore from Indian stock markets so far this month. We are waiting for more indicators before taking any decision regarding investment in emerging markets like India. Let us try to understand what is the reason due to which investors are withdrawing money from the Indian market.

Amid rising bond returns in America, foreign portfolio investors (FPIs) have withdrawn Rs 24,700 crore from Indian stock markets so far this month. On the other hand, they remain enthusiastic about the loan or bond market. During this period he has invested Rs 17,120 crore in the bond market. According to depository data, foreign portfolio investors (FPIs) have withdrawn a net Rs 24,734 crore from Indian stocks so far this month (till January 25). Earlier, FPI had made a net investment of Rs 66,134 crore in the whole of December and Rs 9,000 crore in November.

The trigger is pressed by America

VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that the rising returns on bonds in America are a matter of concern and due to this, FPIs have remained sellers in the Indian market in recent times. He said, now the return on 10-year bonds has again come down to 4.18 percent. This indicates that the interest rate cut by the Federal Reserve will happen only in the second half of 2024. Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said that FPIs started the new year with a cautious approach and have booked profits in the Indian market due to high valuations.

What do the figures say?

He said that apart from this, due to uncertainty over the interest rate scenario, they are also on the sidelines and are waiting for more indicators before taking any decision regarding investment in emerging markets like India. According to the data, FPIs had made a net investment of Rs 18,302 crore in the bond market in December, Rs 14,860 crore in November and Rs 6,381 crore in October. Overall, in 2023, FPIs had infused Rs 1.71 lakh crore in shares and Rs 68,663 crore in the loan or bond market. In this way, his total investment in the capital market was Rs 2.4 lakh crore.