Foreign portfolio investor (FPI) inflows have slowed after investing heavily in Indian stock markets in the last three months. Amid the rise in crude oil prices and the re-emergence of inflation risks, FPIs poured into Indian stock markets in August at Rs. 12,262 crore has been poured.
Himanshu Srivastava, Associate Director-Manager Research, Morningstore India said, “FPIs are adopting a ‘watch and wait’ policy instead of taking a complete ‘U-turn’. Uncertainty remains in the global economy and the underlying scenario is changing rapidly. This Due to this, there will be fluctuation in FPI flow.
According to depository data, foreign portfolio investors in August poured a net Rs. 12,262 crore had been invested. This figure includes investments made through the primary market and wholesale deals.
This is the lowest number of FPI investments in Indian stocks in the last four months. In the last three months, FPIA shares have continuously increased by Rs. 40,000 crores had been invested.
FPI investment in July was Rs. 46,618 crore in June, Rs. 47,148 crore and in May Rs. 43,838 crores. Earlier in April, his investment was Rs. 11,631 crore and in March Rs. 7,935 crores.
Srivastava cited higher crude oil prices and re-emergence of inflationary risks as the main factors for the decline in FPI investment in August. He said that apart from this, FPIs are withdrawing their investments from risky markets due to rise in bond yields in the US.
Srivastava said the continued rise in Indian stock markets has pushed stock valuations beyond the level of satisfaction of some investors. “FPIs sold off in most emerging markets in August due to a strengthening dollar and rising bond yields,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Apart from shares, FPIs also invested in debt or bond markets last month for Rs. 7,732 crore has been invested. Along with this, the total investment of FPIs in shares so far this year is Rs. 1.35 lakh crore and in bond market Rs. 28,200 crore has been reached.