Team Blitz India
NEW DELHI: Foreign investors pulled out a massive Rs 25,586 crore from Indian equities in May due to uncertainty surrounding the outcome of general election and outperformance of Chinese markets.
This was way higher than a net outflow of over Rs 8,700 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 Rs 35,098 crore in March and Rs 1,539 crore in February, while they took out Rs 25,743 crore in January, data with the depositories showed.
Going ahead, election results, which will be out on June 4, could determine FPIs flows into Indian equities in the near future.
“In the medium term, US interest rates will exert more influence on FPI flows,” Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.
The relatively high valuations and weak earnings, particularly in the financial and IT sectors where FPIs have a high allocation, along with political uncertainties such as ambiguity, have led to the FPIs selling, Vijayakumar said.
