FPI pull out Rs 4,615 cr from Indian markets in Apr so far

Foreign portfolio investors (FPIs) have pulled out a net Rs 4,615 crore from Indian markets in April so far amid sharp escalation in COVID-19 cases and the consequent restrictions imposed by various states, unnerving overseas investors.

According to the depositories data, overseas investors pulled out Rs 4,643 crore from equities but invested Rs 28 crore in the debt segment.

This translated into a total net withdrawal of Rs 4,615 crore during April 1-16.

Previously, FPIs invested Rs 17,304 crore in March, Rs 23,663 crore in February, and Rs 14,649 crore in January.

"Various states have imposed restrictions of varying degrees to curb the sharp rise in COVID-19 cases. The fear of rising coronavirus cases and currency depreciation has led to FPI outflows in this month to date," Rusmik Oza, executive vice-president and head (fundamental research) at Kotak Securities, said.

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With respect to other emerging markets, Oza noted that electronics and chip-exporting countries South Korea and Taiwan are witnessing positive FPI flows, whereas others are witnessing no major inflows.

"The overall sentiments have got impacted due to the spread of coronavirus across multiple states as reflected in the fact that except for the Pharma Index, all sectoral indices ended in the red last week," said S Ranganathan, head (research) at LKP Securities.

Future FPI flows will depend on how the second wave of the pandemic and restrictions on economic activity pan out, going forward, said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

Since global economic recovery is strong and emerging markets like India are to benefit from that, FPIs are unlikely to be big sellers in the coming days, he added.

Investments in the equities segment touched Rs 2,74,503 crore, which is the highest quantum of money recorded ever since the National Securities Depository Ltd began making FPI data publicly available.

(Disclaimer: Additional background information has been added to this PTI copy for context)