scorecardresearchFPI sell-off continues for 9-month, pulled out equities worth ₹50,203 crore in June

FPI sell-off continues for 9-month, pulled out equities worth 50,203 crore in June

Updated: 02 Jul 2022, 01:27 PM IST
TL;DR.
FPIs have been persistently selling equities in the Indian markets for the past nine-to-ten months due to various reasons, including tightening of monetary policy, rising current account deficit on account of depreciation of rupee, rising dollar and bond yields in the US.
FILE PHOTO: U.S. dollar banknotes are displayed in this illustration taken, February 14, 2022. REUTERS/Dado Ruvic/File Photo

FILE PHOTO: U.S. dollar banknotes are displayed in this illustration taken, February 14, 2022. REUTERS/Dado Ruvic/File Photo

New Delhi [India], July 2 (ANI): Foreign portfolio investors (FPIs) have pulled out 50,203 crore worth of equities from India in the month of June, according to the latest National Securities Depository data.

FPIs have been persistently selling equities in the Indian markets for the past nine-to-ten months due to various reasons, including tightening of monetary policy, rising current account deficit on account of depreciation of rupee, rising dollar and bond yields in the US.

FPIs typically preferred advanced economies in times of sharp volatility and uncertainty in the overall financial markets.

So far in 2022, they sold equities worth 217,619 crore, NSDL data showed. During the same period, Sensex and Nifty declined over 10 per cent each.

"This massive capital outflow has significantly contributed to the depreciation in INR which breached 79 to the dollar recently. The relentless FPI selling has to be seen in the context of a steadily rising dollar and bond yields in US," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"FPIs are selling more in countries with rising current account deficits like India because the currencies of such countries are vulnerable to further depreciation. Towards the end of June FPI selling has been showing a declining trend."

This trend will be halted only when the dollar stabilises and US bond yields decline, Vijayakumar added. 

First Published: 02 Jul 2022, 01:27 PM IST