Foreign portfolio investors (FPIs) pulled out equities worth Rs 50,203 crore from India in June, according to the latest data from the National Securities Depository.
FPIs have been selling equities in the Indian markets continuously for the past nine-ten months due to various reasons, including tightening of monetary policy, widening current account deficit due to depreciating rupee and rising dollar and bond yields. We.
FPIs generally prefer advanced economies in times of sharp volatility and uncertainty in the overall financial markets.
NSDL data shows that so far, in 2022, they have sold equity worth Rs 217,619 crore. During this period, the Sensex and Nifty fell by more than 10 per cent.
VK Vijayakumar said, “This massive capital outflow has contributed significantly to the depreciation in INR, which recently surged to over $79. Continued FPI sales in the context of an ever-increasing dollar and bond yields in the US should go.” Chief Investment Strategist at Geojit Financial Services.
“FPIs in countries with a growing current account deficit like India are selling more because the currencies of such countries are more vulnerable to depreciation. At the end of June, there has been a decline in FPI sales.”
Mr Vijayakumar said this trend will stop only when the dollar stabilizes and US bond yields decline.