New Delhi:
Foreign portfolio investors (FPIs) pulled out a net Rs 6,105 crore from the Indian capital markets so far in the ongoing financial year amid the pandemic and resultant restructions in many parts of the country.
The equity benchmark BSE Sensex has jumped 3,077.69 points or 6.21 per cent during April-July this fiscal.
Reflecting an upbeat sentiment in the market, the benchmark had reached its all-time high of 53,290.81 on July 16, 2021. It closed at its lifetime high of 53,158.85 on July 15.
According to the depositories data, Rs 6,707 crore were withdrawn on a net basis from equities during the initial four months of this fiscal.
At the same time, a net sum of Rs 602 crore were invested in the debt segment.
This took the total net withdrawl to Rs 6,105 crore during the period under review.
FPI pulled out net investments worth Rs 11,308 crore from Indian equities in July.the outflow comes after net FPI investment in June stood at Rs 17,215 crore.
Post the outflow last month, the net investment into the equities segment in 2021 stands at Rs 49,036 crore.
The data showed that FPIs were net sellers in all the months barring June when they had invested Rs 13,269 crore.
The net outflow stood at Rs 9,435 crore in April, Rs 2,666 crore in May and Rs 7,273 in July.
''What is encouraging during the first four months is the fact that the number of new investor registrations in India is up 2.5 times year on year as per data released by the NSE,'' said S Ranganathan, head of research at LKP Securities.
Six of the 10 most valued domestic firms witnessed a combined erosion of Rs 96,642.51 crore in their market valuation last week, with Reliance Industries Limited taking the biggest hit. Last week, the 30-share BSE benchmark dipped 388.96 points or 0.73 per cent.
While Reliance Industries, Tata Consultancy Services, HDFC Bank, Hindustan Unilever Limited, HDFC and Kotak Mahindra Bank were the laggards, Infosys, ICICI Bank, State Bank of India and Bajaj Finance were the winners.
The market valuation of Reliance Industries tumbled Rs 44,249.32 crore to Rs 12,90,330.25 crore. Tata Consultancy Services witnessed an erosion of Rs 16,479.28 crore to Rs 11,71,674.52 crore in its valuation.
Market experts noted that the financial year started with a surge in COVID-19 cases and the consequent restrictions imposed by various states which dented investors' sentiment.
June witnessed a gradual opening up of the localised lockdown and improved investor sentiments on the back of consistently falling coronavirus cases in the country, hopes of an early opening of the economy along with good quarterly results as per Himanshu Srivastava, associate director – manager research, Morningstar India.
''FPIs started to turn cautious towards Indian equity markets from mid of June and continued with the same stance through July. US Fed's hawkish statement that it might raise interest rates much earlier than assumed was the precursor for the change in their stance,'' Srivastava added.
He further said that there are outflows but they are not exorbitantly high and this signifies that foreign investors are adopting a cautious stance towards Indian equities rather than turning negative on it.
Going forward, on the back of US Fed monetary policy which is keeping its benchmark policy rate unchanged, while indicating that they have begun talking about scaling back bond buying, and rising crude oil prices, FPI flows in the domestic market is expected to remain volatile, said Shrikant Chouhan, executive vice president, equity technical research at Kotak Securities.