ALSO READFPIs pull out $10.6 billion from emerging markets in February so far Foreign funds flock to Indian markets with over $30-bn inflows Risk averse, FPIs withdraw Rs 5,500 cr from equities in September Global cues, funds movement, crude prices to impact equity market next week India attracts biggest share of foreign flows
"FPIs have pulled out of the Indian markets as they seem to be favouring other emerging markets like Brazil. Besides, global cues could be another reason for the outflow," NSE Managing Director and CEO Vikram Limaye said.
According to the latest data available with the depositories, the FPIs withdrew a net amount of Rs 110.37 billion from equities last month.
Besides, the overseas investors withdrew a net amount of Rs 2.53 billion from the debt markets during February 2018.
"In January, the US unemployment rate stood at a 17-year low of 4.1 per cent. In addition to this, there is a good possibility of an increase in the US Federal Reserve rate to counter the rise in inflation. Overall, we witnessed a sell-off globally. The FPI pullout from Indian markets is most likely a result of this," said Harsh Jain, co-founder and COO of online investment platform Groww.
Echoing similar views, Nalini Jindal, chief investment advisor at Intellistocks, said the US inflation is hitting several years low, raising possibility of a hike in the Fed rate, and this has resulted in a caution among FPIs.
"This outflow, however, could be a short-term scenario as India is one of the much sought after destinations for investments by FPIs," she added.
Further, renewed concerns that a rebound in global crude oil prices will have an adverse impact on fiscal deficit too kept market participants cautious, she said.