FPIs pull out ₹32,000 cr on weak rupee, pricey stocks

The rupee dropped 1.6% over the past month—from 85.49 on 27 June to 86.82

- Ram Sahgal

A weakening rupee and high stock valuations, compared to other emerging markets have prompted foreign portfolio investors (FPIs) to pull out over ₹32,000 crore from Indian equities in July—a sharp reversal from their buying trend last month.

The rupee dropped 1.6% over the past month—from 85.49 on 27 June to 86.82 against the US dollar on Tuesday—its lowest level in five months. Due to the rupee’s fall, the BSE Dollex 30 (the dollar-linked version of Sensex) fell 4.8% from 8071.26 to 7686.39 in a month.

In contrast, the Sensex itself fell only 3.2%, from 84,059 to 81,338, showing how currency losses magnified the hit for overseas investors.