- Foreign investors in exit mode due to geopolitical worries, profit-taking
- They had earlier pumped in over Rs 62,000 crore over period of 6 months
- FPIs pump Rs 4,430 crore into debt markets during September 1-22
After taking into the account the latest outflow, the total investment by the FPIs in equity markets stood at Rs 40,253 crore (about $6 billion) this year.
"The first and foremost reason for the FPIs pulling out money is the risk aversion - rising geopolitical tension mainly due to stiff stand between the US and North Korea - which has triggered sell-off across global markets. Emerging markets like India is normally worst hit in such conditions, given they are considered more prone to risks," said Himanshu Srivastava, senior analyst-manager research at Morningstar.
He further said that another reason could be profit booking as Indian stock markets have done significantly better over the last few years. This coupled with rupee appreciation has given overseas investors a good profit booking opportunity.
However, the debt markets retained its allure among the FPIs as a strengthening currency and high yields in the corporate bond markets added to the attraction.