FPIs pull out Rs 2,867 cr from Indian mkts in July so far on profit booking

Foreign portfolio investors (FPI) have pulled out Rs 2,867 crore from Indian markets in July so far, mainly on account of profit booking after surge in Indian equities.

The overseas investors pulled out a net Rs 2,210 crore from equities and Rs 657 crore from debt segment, taking the total net outflow to Rs 2,867 crore between July 1-10, according to the depositories data.

The latest withdrawal has come after investment of Rs 24,053 crore by FPIs in domestic markets in June.

Besides, FPIs have been net investors in the last quarter ended June as "valuations have become extremely rich after the sharp rally and disappointing Q4 FY20 earnings season," Rusmik Oza, executive vice president, head of fundamental research at Kotak Securites, said.

After remaining net buyers in June in the Indian equity markets, FPIs have gone slow with respect to their investments in Indian equities in July so far, said Himanshu Srivastava, associate director - manager research at Morningstar India.

"This could be attributed to intermittent profit booking by FPIs given the surge in the Indian equities in June and in July so far," Srivastava said.

With a relatively long-term investment horizon, Indian equities could be a good investment option for FPIs especially once the COVID-19 crisis is over and the current market trend reverses, he added.

In addition, he said that increased liquidity in the global markets may continue to make its way into the emerging markets, with India too benefiting from the same.

According to Harsh Jain, co-founder and COO, Groww, "The inflows in equity is expected to continue as in long-term, strong fundamentals and growth potential do weigh over short-term volatility and uncertainty".