FPIs pulled out $225 million a day from domestic stocks in 2022

The rupee, which breached 80 against the US dollar, intraday, on Tuesday, has faced sustained pressure on account of selling by overseas funds. 

Foreign portfolio investors (FPIs) have sold at an average of $225 million (Rs 1,720 crore) each day from domestic stocks so far this year. 

The intensity of selling is the highest-ever the Indian market has witnessed as FPI selling this year has neared $30 billion (Rs 2.3 trillion). 

Besides weighing on the rupee and stocks, the sharp FPI selloff has deteriorated the macroeconomic situation. 

India’s balance of payments (BoP) deficit was $16 billion during the March 2022 quarter, the second-most ever after the global financial crisis. 

The rupee is down over 7 per cent year-to-date, while the benchmark equity gauge, the Nifty50, has declined 6 per cent.  

However, it could have been worse if not for the support of domestic investors. 

MFs have invested close to Rs 1.5 trillion into stocks so far this year. 

Among emerging market (EM) peers, the FPI pullout from India is the worst after China and Taiwan. 
 

Large commodity exporters such as Brazil and Indonesia have seen positive foreign flows this year despite a hawkish US Federal Reserve.