Foreign investors withdraw ₹39,500cr from Indian markets in 5 days
What's the story
Foreign Portfolio Investors (FPIs) have continued their selling spree in the Indian markets for the fifth consecutive session. On March 13, they pulled out a net ₹7,491.51 crore (approximately $811.18 million), according to data released by the National Securities Depository Limited (NSDL). In total, FPIs have withdrawn a whopping ₹39,450.60 crore from Indian markets over five trading sessions between March 9 and March 13.
Market impact
Indian equity market worst hit by FPI exodus
The Indian equity market has been the worst hit by this FPI exodus, with net outflows of ₹7,375.05 crore on March 13 alone. The stock exchange segment witnessed net equity sales worth ₹7,311.10 crore while the primary market and others segment saw a net outflow of ₹63.95 crore during this period. Gross equity purchases stood at ₹16,081.97 crore against gross sales of ₹23,457.02 crore during this period.
Debt market
Debt instruments market shows mixed response
The debt instruments market has shown a mixed response to the ongoing FPI withdrawals. The Debt-General limit segment turned positive with a net inflow of ₹503.92 crore, mainly due to primary market activity worth ₹765.42 crore in purchases. However, Debt-FAR continued to be under pressure with net outflows of ₹511.52 crore during this period.
Expert opinion
Global factors impacting FPI sentiment, says expert
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the sustained FPI selling continued unabated in March. He attributed this trend to weakness in global equity markets due to the West Asia war, rupee depreciation, and concerns over high crude prices impacting India's growth and corporate earnings. "FPIs regard South Korea, Taiwan, and China as better markets to invest since they are relatively cheaper than India even after the recent correction," he added.
Market trends
Derivatives front update
On the derivatives front, FPI open interest in index futures rose to 2,87,383 contracts (₹44,829.76 crore) on March 13 from 2,69,670 contracts on March 12. Stock futures open interest stood at a whopping 68,45,218 contracts worth ₹4,23,622.66 crore while index options open interest was at an impressive 29,03,070 contracts valued at ₹4,50,916.22 crore during this period.