Foreign Investors Withdraw 900 Crores In The First Four Sessions

Foreign investors withdraw 900 crores in the first four sessions of September, India-China tensions and weak economic data become reasons. FPI infused Rs 24053 crore in Indian capital markets in June, Rs 3301 crore in July, and Rs 46532 crore in August. On the foreign investment front, there has been a setback in September.

Foreign portfolio investors (FPIs) have netted Rs 900 crore from the Indian capital markets in the first four sessions of September.  As per the data, FPIs pulled out Rs 675 crore net from shares between September 1 and 4 and netted Rs 225 crore from the debt or bond market.

The FPI made this withdrawal due to weak economic data for the first quarter of the current financial year and increasing tension on the India-China border. Earlier in the months of June, July, and August, foreign portfolio investors had made significant investments in Indian capital markets.

FPI infused Rs 24,053 crore into Indian capital markets in June, Rs 3,301 crore in July, and Rs 46,532 crore in August. This investment of FPI created a very positive atmosphere in the stock markets.

In this regard, Himanshu Srivastava, Associate Director and Manager (Research), Morningstar India, said that foreign investors took a cautious stance early in the week before the first-quarter GDP figures were released. Significantly, in the first quarter of the financial year 2020-21, India’s economic growth rate was (-) 23.9 percent.

Srivastava said that due to weak global trend and tension on the Indo-China border, foreign investors withdrew from the Indian capital markets. He said that profit-booking is also another reason for the withdrawal by FPI.

FPIs have booked profit amid the current environment. At the same time, Rasmik Ojha of Kotak Securities says that the cases of coronavirus infection in India have crossed 4 million and selling is going on in the US markets as well. As such, further withdrawals can be done by FPIs in the coming weeks.