Have alarm bells rung for the market? Foreign investors are withdrawing money from India - Newztezz Online

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Monday, January 22, 2024

Have alarm bells rung for the market? Foreign investors are withdrawing money from India


On one hand, there is a boom in the Indian market. Meanwhile, it is indicating danger to foreign investors withdrawing money from the Indian market. Let us try to understand why foreign investors are withdrawing money from India.

Foreign portfolio investors (FPIs) have so far withdrawn more than Rs 13,000 crore from the Indian stock market in the first three weeks of this month. FPIs remain sellers due to high valuation of Indian shares and increase in bond yields in America. According to depository data, contrary to this trend, foreign investors are enthusiastic about the loan or bond market. They have injected Rs 15,647 crore into the bond market during the period under review.

America has played

According to the data, foreign portfolio investors have withdrawn Rs 13,047 crore from Indian stocks this month (till January 19). He sold shares worth more than Rs 24,000 crore during January 17-19. Earlier in December, FPI had put in a net amount of Rs 66,134 crore in shares and in November, Rs 9,000 crore. VK Vijayakumar, chief investment strategist of Geojit Financial Services, said that there are two reasons for the selling by FPIs. The reward on bonds is increasing in America. The yield on 10-year bonds has increased to 4.15 percent from the recent level of 3.9 percent, leading to capital outflows from emerging markets.

Because of this FPIs are withdrawing money

He said that the second reason is the high valuation of shares in India. FPIs are selling on a large scale citing weaker than expected results of HDFC Bank. Himanshu Srivastava, Associate Director, Morningstar Investment Research India, said that the reason for the massive selling by FPIs is the disappointing quarterly results of HDFC Bank. He said that FPIs adopted a cautious approach in the beginning of the new year and booked profits in the Indian stock markets due to high valuations. Apart from this, uncertainty regarding the interest rate scenario has also forced them to remain on the sidelines. They are waiting for more indicators before investing in emerging markets like India.

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