The latest sell-off comes after foreign portfolio investors (FPIs) infused Rs 22,615 crore into Indian equities in February, the highest monthly inflow in 17 months.
New Delhi:Foreign investors withdrew Rs 52,704 crore (approximately USD 5.73 billion) from domestic equities in the first fortnight of March amid escalating tensions in West Asia, the depreciation of the rupee, and concerns over the impact of high crude oil prices on India’s growth and corporate earnings.
The latest sell-off comes after foreign portfolio investors (FPIs) infused Rs 22,615 crore into Indian equities in February, the highest monthly inflow in 17 months.
Prior to that, FPIs were net sellers for three consecutive months, withdrawing Rs 35,962 crore in January, Rs 22,611 crore in December and Rs 3,765 crore in November, according to depository data.
So far in March (until March 13), FPIs have sold equities worth about Rs 52,704 crore in the cash market and remained net sellers on all trading days during the month.
Market experts attributed the pullout mainly to rising geopolitical tensions in West Asia.
Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, said escalating tensions in the region and fears of prolonged conflict disrupting the Strait of Hormuz pushed Brent crude above USD 100 a barrel, triggering a risk-off move. This was compounded by persistent rupee weakness near the Rs 92 level, elevated US bond yields and profit-booking after earlier inflows.
Echoing similar views, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said weakness in global equities following the conflict in West Asia, the depreciating rupee and concerns over high crude prices affecting India’s growth and corporate earnings have weighed on FPI sentiment.