new delhi,may 9
Foreign investors have pulled out Rs 5,936 crore from the Indian equities in the first week of May amid worries over the intense second wave of coronavirus infection and its fallout on the economy. Foreign investors had pulled out Rs 9,659 crore in April after infusing money in the preceding six months, according to the depositories’ data.If fears of COVID-19 persist among overseas investors, then further redemptions cannot be ruled out, Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, stated.According to the data, foreign portfolio investors (FPIs) withdrew a net sum of Rs 5,936 crore from Indian equity markets during May 3-7.Prior to April’s outflow, FPIs had been infusing money in equities since October. They invested over Rs 1.97 lakh crore in equities during October 2020 to March 2021. This included a net investment of Rs 55,741 crore in the first three months of this year.”The nervousness among FPIs with regards to the second wave of coronavirus pandemic in India was visible in the flow numbers for this week,” Srivastava said.Alok Aggarwala, Chief Research Officer, Bajaj Capital, said the pullback by FPIs is consistent with a sharp rise in COVID-19 cases in India, state-wide lockdowns and the consequent slowdown in growth.In addition, a weak currency added to the outflows by FPIs, he added.Harsh Jain, co-founder and COO of Groww, opined that the recent withdrawal could be due to profit booking.”FPIs had started investing heavily around April 2020. Since then, the markets have climbed significantly and many of the stock picks made by them have given good returns over the same period,” he said.He further said that many FPIs are starting to book profits they have made over the last one year and that could be the reason why we are seeing an outflow of money from Indian equities.
