Foreign portfolio investors (FPIs) have pulled out a net Rs 46.15 billion from Indian markets in April so far amid sharp escalation in Covid-19 cases and the consequent restrictions imposed by various states, unnerving overseas investors.
According to the depositories data, overseas investors pulled out Rs 46.43 billion from equities, but invested Rs 280 million in the debt segment.
This translated into a total net withdrawal of Rs 46.15 billion during April 1-16.
Previously, FPIs invested Rs 173.04 billion in March, Rs 236.63 billion in February and Rs 146.49 billion in January.
"Various states have imposed restrictions of varying degrees to curb the sharp rise in Covid-19 cases. The fear of rising coronavirus cases and currency depreciation has led to FPI outflows in this month to date," Rusmik Oza, executive vice-president and head (fundamental research) at Kotak Securities, said.
With respect to other emerging markets, Oza noted that electronics and chip-exporting countries South Korea and Taiwan are witnessing positive FPI flows, whereas others are witnessing no major inflows.
"The overall sentiments have got impacted due to the spread of coronavirus across multiple states as reflected in the fact that except for the Pharma Index, all sectoral indices ended in the red last week," said S Ranganathan, head (research) at LKP Securities.
Future FPI flows will depend on how the second wave of the pandemic and restrictions on economic activity pan out, going forward, said V K Vijayakumar, chief investment strategist at Geojit Financial Services.
Since global economic recovery is strong and emerging markets like India are to benefit from that, FPIs are unlikely to be big sellers in the coming days, he added.
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