Besides equities, FPIs withdrew Rs 10,640 crore from the debt market during the period under review.
Overall, total inflows so far this year have amounted to Rs 459 billion into equity and Rs 45,218 billion into debt markets.
Foreign investors withdrew Rs 6,300 crore worth of domestic stocks in April on concerns over changes in the tax treaty between India and Mauritius and the continued rise in US bond yields.
This follows huge net investment of Rs 35,098 billion in March and Rs 1,539 billion in February, according to depository data.
Foreign portfolio investors (FPIs) had a net outflow of Rs 6,304 crore from Indian equities this month (up to April 26), data showed.
“The trigger for this resumption of FPI selling in both equities and debt is the continued rise in US bond yields. The current yield on 10-year bonds is around 4.7%, which is very attractive for foreign investors,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
While the adjustment of India's tax treaty with Mauritius for Indian investments through the island nation continues to bother foreign investors, weak signals from global markets with uncertain macro and interest rate outlook have weighed on emerging market stocks Himansh Srivastava ) did not bode well. said Morningstar Investment Research India Deputy Head – Manager Research.
Additionally, the surge in commodity prices, especially crude oil, and rising US retail inflation have dashed expectations of an early interest rate cut by the US Federal Reserve, causing US 10-year yields to soar. This may have led foreign investors to adopt a wait-and-see approach, he added.
The positive thing is that all FPIs selling in the stock market are being absorbed by domestic institutional investors (DIIs), high networth individuals (HNIs), and individual investors. This is the only factor that can affect FPI sales.
Besides equities, FPIs withdrew Rs 10,640 crore from the debt market during the period under review.
Earlier, foreign investors invested Rs 13,602 billion in March, Rs 22,419 billion in February and Rs 19,836 billion in January. These inflows were soon followed by the inclusion of Indian government bonds in JP Morgan indices.
JP Morgan Chase announced in September last year that it would add Indian government bonds to its benchmark emerging market index from June 2024.
This landmark inclusion is expected to benefit India by attracting approximately $20-40 billion over the next 18-24 months.
Overall, total inflows so far this year have amounted to Rs 459 billion into equity and Rs 45,218 billion into debt markets.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)