FPI withdraws Rs 1,730 crore from Indian markets so far in May, impact of second wave of Kovid-19

Foreign investors made a net withdrawal of capital of Rs 1,730 crore from Indian markets so far in May.

Foreign investors sold more than 1,730 crore rupees from Indian markets so far in the month of May, selling more for the second consecutive month amid the second wave of the Kovid-19 pandemic. According to data from depository companies, Foreign Portfolio Investors (FPIs) withdrew Rs 3,375.2 crore from the stock market during May 1–28 and made a net investment of Rs 1,645.8 crore in the bond market.

In this way, they were net sellers of Rs 1,729.4 crore in the capital market.

What do the experts say?

However, Himanshu Srivastava, co-director (manager research), Morning Star India, said that after the high selling for eight consecutive weeks in the Indian markets, there has been signs of a steady return in investment of foreign investors for the last two weeks. Shrikant Chauhan, executive vice-president (equity technical research), Kotak Securities Ltd, said that in most Asian markets this month, the tilt of foreign investors has been seen towards the exit.

He said the FPI investment in South Korea and Taiwan markets in May so far has recorded withdrawals of $ 8.5 billion and $ 3.13 billion, respectively. At the same time, Indonesia has seen a net inflow of $ 10.3 million in the month so far. However, concerns about inflation and rising debt have led to pressure in emerging markets. He said that overall reduction in corona infection cases in India is a sign of improvement in the situation. At the same time, removing the concerns of any serious impact of the second wave of epidemic on the economy will help foreign investors regain their confidence in the Indian market.