Foreign portfolio investors (FPIs) have withdrawn over Rs 6,200 crore in just the first two weeks of October.
FPIs are essentially those who invest in securities and other financial assets in an another country.
FPIs pulling out a significant amount of money in October raises alarm as this has been a truncated trading month with several market holidays already.
Out of the over Rs 6,200 crore withdrawal, foreign investors have pulled out over Rs 4,500 crore from equities and over Rs 1,000 crore from the debt market.
Analysts believe the fear of a global recession as well as a potential trade war is hurting market sentiment. They also feel the consistent cuts in Gross Domestic Product (GDP) forecasts for India are spooking the market.
They say despite the government's several announcements on boosting the economy, recovery will only be gradual and slow.