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 ($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 signaled that a December rate hike is very much on the table as the economy has performed well, which prompted investors to withdraw money.