FPIs look for safer destinations
Overseas investors pulled out a net Rs 9,103 crore from the Indian markets in April so far as the Covid-19 crisis triggered a return to safe-haven assets such as gold and dollar-denominated securities.
According to the latest depositories data, foreign portfolio investors (FPI) withdrew a net sum of Rs 2,951 crore from equities and Rs 6,152 crore from the debt segment between April 1 And April 9. The total net outflow stood at Rs 9,103 crore.
In the previous month, FPIs had withdrawn a record amount of over Rs 1.1 lakh crore on a net basis from the Indian markets (both equity and debt).
The capital outflow in March was the highest withdrawal ever since FPI data has been made available on National Securities Depository Ltd.
“Emerging markets have been worst hit with foreign investors marching out to take shelter in safer investment avenues. India has been among the worst hit in the emerging market basket. Enhanced volatility can be seen in both the markets with equity markets falling sharply and yields in the fixed income segment moving up significantly,” said Himanshu Srivastava, senior analyst manager research, Morningstar India.
Harsh Jain, co-founder and Coo at Groww, noted that FPI investments in the equity category have been positive in the last two trading sessions of April and this can be explained by the sentiment in the European markets changing on hopes that the virus is nearing its peak.
According to Srivastava, though the broader trend continues to be negative, this week the quantum of net outflow was much lower compared to the previous few weeks.