In the initial three weeks of this month, foreign investors have taken a cautious stance, selling off Indian equities amounting to Rs 13,000 crore. This decision is attributed to the elevated valuations of Indian stocks and the rising yields of US bonds. Conversely, foreign investors have displayed optimism in the debt market, injecting Rs 15,647 crore during the same period, as per data from the depositories.
As per the data, foreign portfolio investors (FPIs) have recorded a net withdrawal of Rs 13,047 crore from Indian equities in the current month until January 19. Notably, they pulled out more than Rs 24,000 crore from equities during the period from January 17 to 19. Preceding this, FPIs had made a net investment of Rs 66,134 crore in December.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that the surge in the US bond yield, rising from the recent level of 3.9% to 4.2%, has triggered capital outflows. Additionally, he mentioned that the high valuations in India provided FPIs with an excuse to undertake substantial sales, especially in light of less-than-expected results from HDFC Bank.
