FPIs take out Rs 3,200 cr from stocks on Trump jitters

Continuing their selling spree, foreign investors have pulled out close to Rs 3,200 crore from the Indian stock market this month so far on concerns that Donald Trump’s impending reforms may spark outflows from emerging markets.

The net outflow by foreign portfolio investors (FPIs) comes following a withdrawal of Rs 4,306 crore from equity markets in October. Prior to that, the equity markets had witnessed an inflow of over Rs 10,000 crore. Investors appeared to be cautious on fears that US President-elect Trump’s planned huge spending policies would be inflationary that may lead to US interest rate hike and dent the appeal of emerging markets.

“As euphoria surrounding the US election settled, prospects of outflows from emerging markets to the US, anticipating reform measures from Trump, and rise in US treasury yields have resulted in sharp sell-off in Asian markets. The anticipated rise in spending in the US has also upped the ante for FOMC rate hike in December,” Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services, said.