Comments
Overseas investors have pulled out close to ₹13,000 crore from Indian equities since the beginning of the current fiscal year amid concerns over the Covid-19 second wave and its likely impact on India Inc’s earnings.
According to depositories data, foreign portfolio investors (FPIs) pulled out ₹9,659 crore from equities in April followed by a net outflow of ₹3,420 crore in the May 1-27 period. In contrast, FPIs had made record investments of ₹2.74-lakh crore in Indian equities in FY21 despite the pandemic.
Pandemic impact
“There has been sustained selling by FIIs in early FY22. The intensity of the second wave of the pandemic and its fallout on growth and corporate earnings might have partly unnerved FIIs who sold in India and moved the money to markets like South Korea and Taiwan, which were not impacted by the second wave,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
wHe, however, added that while Q1 FY22 growth and earnings might be impacted, the full year earnings growth is unlikely to be as the steady decline in fresh Covid cases and sustained rise in recoveries indicate progressive unlocking starting June.
FPIs were net sellers between May 1 and 18, pulling out ₹10,266 crore. However, the foreign investors turned net buyers in the last six trading sessions pumping in ₹6,846 crore taking the net outflow in May to ₹3,420 crore.
According to experts, India is definitely the lowest performing country in terms of controlling the virus. The highest caseload does not inspire confidence with investors. Control of the virus through calibrated lockdowns as well as a successful vaccination plan is needed to bring back the investors.
According to fortnightly sector-wise investment data, between May 1 and 15, FPIs pulled out ₹2,476 crore from the insurance sector followed by Software & Services (₹2,076 crore) and financial services (₹1,890 crore).
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.