[ad_1]
Foreign investors have pulled over ₹6,400 crore from the Indian equity market in the first four trading sessions of the ongoing month when the Reserve Bank of India (RBI) and US Federal Reserve raised interest rates.
Given the headwinds in terms of elevated crude prices, inflation, tight monetary policy among others, FPIs’ flows in India are expected to remain volatile in the near term, Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities, said.
Foreign Portfolio Investors (FPIs) remained net sellers for seven months to April 2022, withdrawing a massive amount of over ₹1.65 lakh crore from equities. This was largely on the back of anticipation of a rate hike by the US Federal Reserve and due to the deteriorating geopolitical environment following Russia’s invasion of Ukraine.
After six months of selling spree, FPIs turned into net investors in the first week of April amid correction in the markets and invested ₹7,707 crore in equities. After a short breather, once again they turned net sellers during the holiday-shortened April 11-13 week, and the sell-off continued in the succeeding weeks too.
FPI flows continue to remain negative in the month of May till date and they have sold around ₹6,417 crore during May 2-6, data with depositories showed. The trading in market was closed on May 3 on account of Eid.
“With central banks across the world pressing the panic button and increasing interest rates, equity markets have also reciprocated the sentiment. Foreign investors continue to sell relentlessly,” Vijay Singhania, Chairman, TradeSmart, said.
Making similar statement, Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, said the week turned out to be an eventful one. RBI in an off-cycle monetary policy review on May 4 hiked the policy repo rate by 40 bps with immediate effect and cash reserve ratio by 50 bps effective May 21. This attracted a sharp reaction from the markets which have been on a downward spiral ever since.
On the other hand, the US Fed too raised rates by 50 bps on the same day, the biggest hike in two decades. Among investors, it fanned fears that going ahead, further large rate hikes are likely to come, he added.
Further, the Bank of England lifted its key rate to the highest level since 2009. Also, the market expects that Britain could see inflation at 10 per cent. Additionally, concerns over COVID-19 in China could upset global supply chains and hit growth. This makes foreign investors move back to its home country, Chouhan said.
Apart from equities, FPIs withdrew a net amount of ₹1,085 crore from the debt market during the period under review.
Going forward too, market volatility is expected to remain high as foreign investors may continue to withdraw funds. Unless the war is called off, selling is expected to continue, TradeSmart’s Singhania said.
According to Morningstar’s Srivastava, there is nothing much at the moment, which could cheer up foreign investors and coax them to invest in Indian equity markets.
“Besides the rate hikes by both RBI and US Fed, uncertainty surrounding Russia-Ukraine war, high domestic inflation numbers, volatile crude prices and weak quarterly results does not paint an incredibly positive picture. The recent rate hikes could also slow the pace of economic growth, which is also a concern,” he said.
Adding to the worry is the resurgence of coronavirus cases in China and in some other parts of the world. In such a scenario, FPIs typically turn risk-averse and adopt a wait and watch approach until greater clarity emerges, he added.
Under the given circumstances and fast-changing global landscape, foreign flows into Indian equities could continue to be under pressure, until there is a change in the underlying drivers and investment scenario, he added.
Apart from India, other emerging markets, including Taiwan, South Korea and the Philippines witnessed outflows in the month of April to date.
[ad_2]
Source link
hello!,I love your writing very much! proportion we
keep in touch extra approximately your post on AOL? I
require a specialist on this area to unravel my problem.
Maybe that’s you! Looking ahead to look you.
Greetings from California! I’m bored at work so I decided to
browse your website on my iphone during lunch break. I really like the info you present
here and can’t wait to take a look when I get home.
I’m surprised at how fast your blog loaded on my phone ..
I’m not even using WIFI, just 3G .. Anyhow, fantastic blog!
I think everything typed was actually very reasonable. However, what about this?
what if you composed a catchier post title? I am not
suggesting your information isn’t good, however suppose you added a
title that makes people want more? I mean FPIs withdraw ₹6,400 crore from equity markets in May
so far is a little vanilla. You ought to glance at Yahoo’s
home page and note how they create news titles to grab viewers
to click. You might try adding a video or a picture
or two to get people excited about everything’ve got to say.
In my opinion, it would bring your posts a little livelier.
Hi to all, the contents present at this site are actually
amazing for people knowledge, well, keep up the good work
fellows.
For slots, the RTP or ‘Return to player’ percentage is a
guide to which slots payout the most, or
at least are programmed to pay the most relative to the stake get more info than an undetermined time.
I’m really enjoying the design and layout of your website.
It’s a very easy on the eyes which makes it much more enjoyable for me to
come here and visit more often. Did you hire out a designer
to create your theme? Great work!
Hello there! This blog post couldn’t be written much better!
Looking at this post reminds me of my previous roommate! He continually kept talking about this.
I will forward this post to him. Fairly certain he will have
a good read. Thanks for sharing!
At this time it appears like Movable Type is the top
blogging platform out there right now. (from what I’ve read) Is that what you
are using on your blog?
We prioritize higher-profile caasino web pages and the ones who got the
most visits from our listing pages.
Stop by my webpage: fxhub.kr
2001 Apr; 12 4 1009 17 comprar levitra barato
Most casuno visitors love to play blackjack since it is not just a game of luck.
my page – inscore.co.kr
Thanks for another informative web site. The place else may just I am getting that type
of info written in such an ideal way? I’ve a venture that I am simply now running on, and I have been on the
look out for such info.
Reduce up your credit cards and let your spouse manage the
checkbook.
My homepage :: more info
Essentially, you maje a very first deposit and
you are rewarde with a bonus.
Feel free to surf to mmy homepage: 카지노사이트
There are so lots of additional promotions to decide onn
from, just check out the promotions page.
My web blog: get more info
were named top 100 corporate criminals of the 1990 s, whose fraud allegations have resulted in fines exceeding millions cialis 20mg for sale