Unabated offloading by FPIs

New Delhi: Foreign investors withdrew nearly Rs14,800 crore from domestic stocks in the first week of this month, influenced by India’s Lok Sabha election results and attractive valuations of Chinese stocks.

The outflow came following a net outflow of Rs25,586 crore in May on poll jitters and more than Rs8,700 crore in April on concerns over a tweak in India’s tax treaty with Mauritius and a sustained rise in US bond yields. Before that, FPIs made a net investment of Rs35,098 crore in March and Rs1,539 crore in February, while they took out Rs25,743 crore in January, data with the depositories showed. From a medium to long-term perspective, the direction of interest rates will remain a key driver for foreign investment flows into the Indian equity markets. According to the data, Foreign Portfolio Investors (FPIs) made a net withdrawal of Rs14,794 crore this month (till June 7). The general election results in India significantly influenced foreign investor flows in Indian equity markets in June.