Overseas investors have pulled out more than Rs 2,800 crore from Indian capital markets in the last two weeks due to subdued quarterly earnings and fears of a possible rate hike by the US Federal Reserve.

The sell-off came after Foreign Portfolio Investor (FPI) inflow had hit a seven-month high in October.

As per data compiled by the depositories, net outflow in equities stood at Rs 2,505 crore between November 2-13, while it was Rs 313 crore from debt, translating into a total of Rs 2,819 crore (USD 433 million).

Earlier, FPIs had made a net investment of Rs 22,350 crore last month, making it the highest investment by investors since March, when they had poured in Rs 20,723 crore into the Indian market.

The huge inflows during October also reversed the outflows seen during the last two months. FPIs pulled out over Rs 23,000 crore from the capital markets (equities and debt) in the past two months (August—September) on fears of an economic slowdown in China, which triggered a global sell—off.

Earlier this month, US Fed Chair Janet Yellen had signalled that a December rate hike is very much on the table as the economy has performed well, which prompted investors to withdraw money.

Investor mood remained fragile because of disappointing quarterly earnings by blue-chips.

Further, macroeconomic data also impacted investor sentiment. Industrial production slackened to a four-month low of 3.6 per cent in September, while retail inflation inched up to 5 per cent in October, as per the latest data released on Friday.

“Bears continue to tighten grip in line with poor global cues, and overseas investors withdrew money on fears of a rate hike by Fed next month,” Hem Securities Director Gaurav Jain said.

Since the beginning of the year, overseas investors have made a net investment of Rs 25,191 crore in equities and Rs 54,783 crore in debt market.

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