FPIs siphon out record Rs17,000 crore in August

Overseas investors have pulled out a record over Rs 17,000 crore from the Indian equity markets last month owing to a sharp global sell-off triggered by a rout in Chinese equities. The net outflow by foreign portfolio investors (FPIs) — an all-time high since 1997 — followed a net investment of Rs 5,323 crore in July. FPIs withdrew a net Rs 17,428 crore from the stock markets in August, according to depository data, which include Monday's provisional figures. However, the segregated data are not available prior to 1997.

In October 2008, FPIs had offloaded a net Rs 15,347 crore from the markets in the aftermath of Lehman Brothers collapse, which triggered the global financial crisis. Of this total amount, FPIs withdrew a net Rs 5,173 crore on the 'Black Monday' alone, when the benchmark BSE Sensex had crashed over 1,624 points while 50-share NSE Nifty plunged 491 points.

FPIs have been cautious since the beginning of August, turning net sellers in the past seven trading sessions. Experts attributed the huge outflow to the sharp global sell-off due to fears of a Chinese growth slowdown. However, they believe that the outflows are unlikely to continue for a long time.

Since the beginning of the year, FPIs have made a net investment of Rs 27,522 crore in equities and Rs 38,704 crore in debt markets.