Foreign portfolio investors (FPIs) have emerged as a net sell-off in the first week of May with a heavy sell-off in equity markets on global inflation concerns, tightening of monetary policy and uncertainties over the Russia-Ukraine war, leading to volatility. The atmosphere is created. ,
Foreign from May 2 to May 6extracted 6,417 crore in the equity market, data provided by NSDL showed. So far this year, FPIs have been only net sell-offs in stocks. In April 2022, the FPI outflow was 17,144 crore in this market.
There was FPI outflow in the equity market 41,123 crore in March 2022, while it was 35,592 crore in February and 33,303 crore in January this year.
Meanwhile, FPIs were sellers in the credit market with outflows of Rs. 1,085 crores from May 2-6, while marginal sales of 9 crore in the hybrid market. On the other hand, the loan-VRR market saw an influx of 767 crores during the first week of May.
Overall, there has been FPI outflows (including equity, debt, debt-VRR and hybrid) in the Indian market so far in May. 6,745 crores.
It will be keenly watched whether the next week in May will witness a easing of the bears. The year 2022 has been so volatile with FPIs being net sellers.
Overall, FPIs pulled out in April 2022
In India, last week, the markets were shocked by the sudden surprise of 40 basis points hike in the repo rate by RBI to 4.4%. This was quicker than expected, pointing to the severity of rising inflation and further raising concerns about the growth revival of the economy hit by the pandemic. RBI is taking steps to ensure adequate liquidity. Like other central banks globally, the RBI’s policy stance is seen to be inclined towards a hardline stance amid inflationary pressures. The US Federal Reserve and the Bank of England have also raised their key rates to combat inflation.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “Since the markets have become very weak globally, FPIs may continue to sell lower volumes. Even after the recent correction in the market, valuations are not cheap. Perhaps, if Nifty corrects another 5% from current levels, FPIs are likely to become buyers. With aggressive Fed tightening, lockdown in China, and Ukraine war situation is not conducive to sharp turnaround in markets.”