The foreign investors have pulled out close to Rs 32,000 crore from the capital markets in the first three weeks of this month due to the ongoing global trade tiff, rising crude prices and higher US treasury yields.
This is much higher than the over Rs 21,000 crore net outflow seen in entire September. Prior to that, overseas investors had put in a net amount of Rs 7,400 crore in the capital markets (both equity and debt) in July-August.
According to the latest depository data, foreign portfolio investors (FPIs) sold equities to the tune of Rs 19,810 crore during October 1-19 and bonds worth Rs 12,167 crore, taking the total to Rs 31,977 crore ($4.3 billion).
Negative sentiments from the global market on concerns over a slowing world economy led by lingering trade war between the US and China triggered the FPI pullout, said Vinod Nair, head of research, Geojit Financial Services.
Alok Agarwala, senior vice president and head investment analytics at Bajaj Capital, attributed the FPI selling to rise in oil prices and the US treasury yields and a tightening of global dollar liquidity.
He further said that this is a global phenomena across emerging markets and not limited to India alone.