Vendors FPIs net for the second consecutive month; release Rs 1,730 crore in May

Foreign portfolio investors (FPIs) have emerged as net traders for the second month in a row by withdrawing approximately 1,730 rupees from the Indian market in May as the second wave of coronavirus investment sentiment.

In April, total exports from major Indian markets (both equity and debt) stood at Rs 9,435 crore.
Based on the details of the deposit, foreign investors went out and issued 3,375.2 rupees on equities but invested Rs 1,645.8 crore in the debt portion between May 1 and May 28.

This took the total outflow to Rs 1,729.4 crore.

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However, Morningstar India Associate Director Himanshu Srivastava said FPI’s entry into the Indian financial markets was showing signs of stabilization two weeks ago, after seeing a total outflow of prices for eight consecutive weeks.
Kotak Securities Executive (Equity Technical Research) Vice President Shrikant Chouhan said many emerging and Asian markets have seen the outpouring of FPI this month so far.

“South Korea and Taiwan have seen the highest monthly FPI exit from USD 8.5 billion and USD 3.13 billion respectively.

“In contrast, Indonesia has seen FPI inflows in the months leading to USD 103 million. Most notably, concerns about inflation and rising debt levels keep emerging markets under pressure,” he added.
The fall of coronavirus cases in India and the signs of progress in the whole situation are a good sign, says Srivastava.

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Also, reducing the risk of any negative impact of the second wave of the epidemic on the economy could help foreign investors regain their confidence in Indian currency, he added.

Vaccination of large numbers of people in India remains a challenge that cannot be resolved immediately, said one of Groww’s founders and Chief Operating Officer Harsh Jain.

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After August, when large doses of vaccines were available in India, the number of vaccines could be expected to rise sharply leading to lowering all types of vaccines, he said.

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