Foreign investors have brought Rs 11,557 crore into the Indian equity market so far in December. This comes as market correction and concerns over re-emerging COVID in China have gripped the international and domestic markets.
According to data with the depositories that came out on December 23, Foreign Portfolio Investors (FPIs) invested a net worth of Rs 11,557 crore in equities between December 1 to December 23.
In November, FPI’s net investment was Rs 36,200. This was mainly due to the weak US dollar index and overall macroeconomic trends being favorable. Foreign investment in October and September were Rs 8 crore and Rs 7,624 crore, respectively, according to data from the depositories.
However, the quantum of net inflow was much lower. It was at a little over Rs 1,000 crore in the week ended December 23 much lower than Rs 6,055 crore recorded in the previous week.
So far this year, FPIs have pulled out a net sum of Rs 1.21 lakh crore from the equity markets. In December, foreign investors sold stocks of consumer durables, oil and gas, power and financials while most of them bought autos, capital goods, FMCG, and real estate stocks.
In the ongoing global uncertainty in the market, many investors have chosen to book profits with Indian markets touching all-time highs recently.
“Despite correction in the markets, increasing concerns over re-emergence of COVID in some parts of the world and recession worries in the US, FPIs remained net buyers in the Indian equity markets (in December),” Himanshu Srivastava, Associate Director – Manager Research, Morningstar India told news agency PTI. He noted that the fall in net inflow does indicate that foreign investors are gradually turning cautious given the recent developments and ongoing uncertainties.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services told the agency, “Concerns about COVID spread in China is a sentiment negative and the strong economic data from the US indicate continuation of the hawkish stance of the Fed which is pushing bond yields up and equities down. Only reversal of this trend will trigger a rebound in the market.”
Foreign investors withdrew a net sum of Rs 2,900 crore from the debt markets in December.