FPIs take out `25,586 cr from equities in May

New Delhi: Foreign investors pulled out a massive Rs 25,586 crore from Indian equities in May due to uncertainty surrounding the outcome of general election and outperformance of Chinese markets.

This was way higher than a net outflow of over Rs 8,700 crore in April on concerns over a tweak in India’s tax treaty with Mauritius and a sustained rise in US bond yields.

Before that, FPIs made a net investment of Rs 35,098 crore in March and Rs 1,539 crore in February, while they took out Rs 25,743 crore in January, data with the depositories showed.

According to the data, Foreign Portfolio Investors (FPIs) made a net withdrawal of Rs 25,586 crore from equities in May.

Another reason was the spike in US bond yields. Whenever the US 10-year bond yields rose above 4.5 per cent, FPIs sold in emerging markets like India and moved money to bonds. These two factors triggered the selling in equity in India, he added.

On the other hand, FPIs invested Rs 8,761 crore in debt and Rs 4,283 crore through debt-VRR (Voluntary Retention Route).