FPIs exit Indian equities, Rs 10k cr outflow in September

Foreign Portfolio Investors (FPIs) have pulled out over Rs 10,000 crore from Indian equities in the first three weeks of September, primarily due to rising US interest rates, recessionary fears, and overvalued domestic stocks.

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Before the outflow, FPIs were incessantly buying Indian equities in the last six months from March to August and brought in Rs 1.74 lakh crore during the period.

Mayank Mehra,  smallcase, manager and principal partner at Craving Alpha, believes that strong economic growth prospects, attractive valuations, and government reforms could support foreign investment flows in the next month.

“Since valuations remain high even after the recent pullback and US bond yields are attractive (the US 10-year bond yield is around 4.49 per cent) FPIs are likely to press sales so long as this trend persists,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.