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FPIs turn net sellers in September, pull out Rs 2,038 cr so far

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NEW DELHI: Foreign portfolio investors (FPI) turned net sellers in Indian markets by drawing out Rs 2,038 crore so far in September as participants converted cautious in view associated with rising Indo-China tensions plus weak global cues.

According to the depositories data, some sort of net Rs 3,510 crore was withdrawn through equities, while Rs a single,472 crore was streamed into debts by FPIs between September 1-11.

FPIs were net buyers for 3 consecutive months — 06 to August.

They put in Rs 46,532 crore in August, Rs several,301 crore in Come early july and Rs 24,053 crore in June with a net basis.

“FPIs acquired a cautious stance in direction of investing in the Of india equity markets since the start of September,” Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, noted.

Citing the reasons, Srivastava said the sharp slowdown in the Indian economy during the quarter ended June 2020 dented investor sentiments and FPIs preferred to stay on the sidelines also because of weak global cues and rising border tension between India and China.

The recent net outflows could also be attributed to profitinstructionsbooking by FPIs on the back of surge in the Indian equity markets, he added.

Regarding investment in the debt segment, Srivastava noted that amidst aggressive bond buying by the US Fed, the yields there have come down which could be one of the reasons for FPIs to look for other attractive investment destinations like Indian debt markets that could potentially offer better returns.

However, relatively lesser quantum of net inflows also indicates that FPIs are yet to gain a relatively high level of conviction on the Indian debt markets to invest substantially, he added.

Going forward, “on the domestic front, the challenges with respect to rising COVID-19 cases and recovery of economic growth remains and escalation of tension between Asia plus China at the border may not augur well for the markets,” Srivastava said.

He further noted that on the global front, rising COVID-19 infection and tension involving YOU and China could turn investors risk averse if often the scenario calls for.

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