Foreign investors turned net sellers for the fourth consecutive month in January 2022, withdrawing ₹28,526 crore from Indian equities. This comes on the back of the indication of a rate hike by the US Federal Reserve.
Since October 2021, the foreign investors have withdrawn a whopping ₹73,186 crore as per the depositories data. Foreign investors were net buyers for 6 months in 2021 - Jan, Feb, March, June, August and September.
In 2021, FIIs bought Indian equities worth ₹27,755 crore in September, the highest during the year and sold the most Indian equities worth ₹29,702 crore in December, followed by in October.
In the previous month (January 2022), the FPIs infused ₹5,194 crore into the debt segment and ₹1,696 crore into hybrid instruments during the same period.
"FPIs have been booking profits in IT where they have been sitting on big profits after the huge appreciation in the last two years," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted.
As per a Motilal Oswal report, FII holding in Nifty500 was down 160 bps YoY to 20.9 percent in the third quarter of the current financial year. FIIs also reduced their ownership in 74 percent of the Nifty 50 companies on a QoQ basis.
As per another Kotak Securities report, other emerging markets like South Korea, Taiwan and the Philippines also witnessed negative flows of $2.77 billion, $2.5 billion and $56 million, respectively in January. However, Thailand and Indonesia witnessed inflows worth $442 million and $418 million, respectively in the same period.
It further added that the Reserve Bank's need to curb the rise in inflation and Fed signaling asset tapering after hiking borrowing costs will likely keep equity markets volatile.
| Month | FPI inflows/outflows ( ₹Crore) |
|---|---|
| January 2022 | -28,526 |
| December 2021 | -29,702 |
| November 2021 | -2,520 |
| October 2021 | -12,436 |
| September 2021 | 27,755 |
| August 2021 | 16,555 |
| July 2021 | -7,409 |
| June 2021 | 12,973 |
| May 2021 | -1,957 |