You are here: Home » Markets » News
Business Standard

FPIs pull out Rs 2,038 cr in September amid rising Indo-China tensions

According to the depositories data, a net Rs 3,510 crore was withdrawn from equities, while Rs 1,472 crore was pumped into debts by FPIs between September 1-11

Topics
Foreign Portfolio Investors | FPI outflow | India China tension

Press Trust of India  |  New Delhi 

FDI, INVESTMENT, investment, foreign investment, foreign direct investment, FPI, dollar inflow, GROWTH, MARKETS, FUNDS, SHARES, DEMAND, GROWTH, mutual fund, fund, stocks
They invested Rs 46,532 crore in August, Rs 3,301 crore in July and Rs 24,053 crore in June on a net basis.

(FPI) turned net sellers in Indian by pulling out Rs 2,038 crore so far in September as participants turned cautious in view of rising Indo-China tensions and weak global cues.

According to the depositories data, a net Rs 3,510 crore was withdrawn from equities, while Rs 1,472 crore was pumped into debts by FPIs between September 1-11.

FPIs were net buyers for three consecutive months -- June to August.

They invested Rs 46,532 crore in August, Rs 3,301 crore in July and Rs 24,053 crore in June on a net basis.

"FPIs adopted a cautious stance towards investing in the Indian equity since the beginning of September," Himanshu Srivastava, Associate Director - Manager Research, Morningstar India, noted.

Citing the reasons, Srivastava said the sharp slowdown in the Indian economy during the quarter ended June 2020 dented investor sentiments and FPIs preferred to stay on the sidelines also because of weak global cues and rising border tension between India and China.

ALSO READ: Govt may extend time limit for emergency credit line guarantee scheme

The recent net outflows could also be attributed to profit-booking by FPIs on the back of surge in the Indian equity markets, he added.

Regarding investment in the debt segment, Srivastava noted that amidst aggressive bond buying by the US Fed, the yields there have come down which could be one of the reasons for FPIs to look for other attractive investment destinations like Indian debt that could potentially offer better returns.

However, relatively lesser quantum of net inflows also indicates that FPIs are yet to gain a relatively high level of conviction on the Indian debt markets to invest substantially, he added.

Going forward, "on the domestic front, the challenges with respect to rising Covid-19 cases and recovery of economic growth remains and escalation of tension between India and China at the border may not augur well for the markets," Srivastava said.

He further noted that on the global front, rising Covid-19 infection and tension between US and China could turn investors risk averse if the scenario demands.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sun, September 13 2020. 16:05 IST
RECOMMENDED FOR YOU
.