Foreign Investors’ Stake In Domestic Stocks Declined By 14%

Foreign investors’ stake in domestic stocks declined by 14%, and FPIs investment stood at $523 billion in the June quarter.

Foreign portfolio investors (FPIs) holding in domestic equities in capital terms declined by 14 percent to $523 billion during the June quarter of the current fiscal.

It was $612 billion in the previous quarter. At the same time, the value of FPI investment in the Indian stock market in the April-June quarter of the last financial year was $592 billion.

Foreign investors’ stake in domestic stocks declined: According to a Morningstar report, this is the third consecutive quarter that FPIs’ stake in Indian equities has declined.

Foreign investors were taking a cautious approach since the beginning of the year and their worries have increased after worrying developments in both global and domestic grain markets.

The share of FPIs in terms of market capitalization in the domestic equity markets also fell to 16.9 percent in the quarter under review, from 17.8 percent in the March quarter of the previous financial year.

During the quarter ended June 2022, FPIs sold assets net worth $13.85 billion. However, this is lower than the figure of $14.59 billion for the March quarter.

The continued aggressive policy stance by the US central bank Federal Reserve weighed on foreign investor sentiment since the beginning of the quarter.

Bond receipts have also risen globally, affecting FPI investments. The US central bank has raised interest rates by 1.5 percentage points so far in 2022.

Foreign investors’ stake in domestic stocks declined by 14%: Increasing the participation of foreign institutional investors.

Vinod Nair, Head of Research, Geojit Financial Services, said that the participation of Foreign Institutional Investors (FIIs) in the domestic markets is steadily increasing.

This is giving strength to the market. The fall in commodity and oil prices has also instilled confidence among foreign investors.