FPIs pullout $280 mn so far this year; DIIs invest $10 billion
New Delhi: Foreign investors have pulled out $280 million from the Indian equity markets so far this year, while domestic institutional investors (DIIs) continue to invest more aggressively and have put in a staggering $10 billion.
The latest round of outflow came after foreign portfolio investors (FPIs) had poured in $7.77 billion in 2017, while DIIs had invested $14 billion during the same period, said a report by Morningstar Investment Adviser.
While in January, FPIs bought net assets worth $2.2 billion, they were net sellers to the tune of $1.8 billion in February. Again, in March, they invested $1.8 billion in equity markets, whereas they offloaded net assets worth $3 billion during April-June. However, they put in $330 million in July and $242 million in August so far.
On the other hand, domestic institutional investors started the year on a negative note and withdrew $111 million in January, however, they put in money in February and the bullish trend continued so far in August. Overall, their investment in the equity market stands at $10 billion so far in 2018.
FPIs have adopted a cautious stance towards India and other emerging markets from the beginning of April.
"Initially surging bond yields in the US and high crude prices held investors on the tenterhook, later the dollar started to appreciate considerably, which did not augur well for emerging markets. Consequently, the country witnessed net FPI outflows.
"Expectation of more rate hikes by the US Fed had hurted sentiments, too," said Himanshu Srivastava, Senior Analyst - Manager Research, Morningstar.
On the valuation front, Indian markets, with their substantial runup over the last few years, did not look too attractive vis-a-vis other comparable peer countries. This also prompted FPIs to adopt a wait-and-watch approach towards India and look at other options available at attractive valuations and at a similar risk level, he added.
Again, overseas investors made a comeback in July and continue to be on the buying side so far in August.