FPI Flow In Indian Stock Market Is Negative In January 2023 Till Now Due To Cautious View

FPI Investment: Foreign portfolio investors (FPIs) pulled out Rs 15,000 crore from Indian stock markets in the first week of January amid rising cases of Kovid infection in some parts of the world and concerns about a recession in the US. Earlier, FPIs had netted Rs 11,119 crore in the stock markets in December. In November, he had made a net investment of Rs 36,239 crore. FPIs have been adopting a cautious approach towards the Indian stock markets for the last few weeks.

Net withdrawal of Rs 15,068 crore from Indian stock markets in January

Shrikant Chauhan, head of equity research (retail), Kotak Securities Ltd., said that going forward, FPI inflows will remain volatile. However, domestic and global inflation is now coming down. According to depository data, FPIs made a net withdrawal of Rs 15,068 crore from Indian stock markets during January 2 to 13. FPIs have been net buyers only on two days in 10 trading sessions in January.

Year 2022 was worst in terms of FPI flow

Overall, FPI had withdrawn Rs 1.21 lakh crore from the Indian stock markets in 2022. The main reason for this is the aggressive increase in interest rates by central banks globally, especially the aggressive stance of the Federal Reserve, volatility in crude oil prices and rise in commodity prices due to the Russia-Ukraine war. Last year has been the worst in terms of FPI inflows. In the last three years, FPIs were net investors in the Indian stock market.

India’s position is comparatively strong

Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said, “There is still a threat of Kovid in different places of the world. Apart from this, concerns about the recession in America are preventing FPIs from investing in emerging countries like India. In January, apart from stocks, FPIs have also withdrawn Rs 957 crore from the loan or bond market. Apart from India, FPIs in Indonesia Inflows have been negative, however, they have been net buyers in the Philippines, South Korea and Thailand markets.

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