FPI Data: The process of withdrawal of foreign portfolio investors (FPIs) from the Indian stock market continued in the last financial year (2022-23) as well. In the last financial year, FPIs made a net sale of Rs 37,631 crore amid aggressive hike in interest rates by central banks globally. Earlier in 2021-22, FPI had made a record withdrawal from the Indian stock market.
FPIs sold for 2 consecutive financial years
Foreign portfolio investors started investing in the Indian stock market in 1993. This is the first time since then that FPIs have been net sellers for two consecutive financial years. In the financial year 2021-22, he sold shares worth Rs 1.4 lakh crore. According to depository data, the pace of their withdrawal has slowed down to Rs 37,632 crore in the financial year 2022-23. Earlier in 2020-21, FPI had invested a record Rs 2.7 lakh crore in shares. His investment in 2019-20 stood at Rs 6,152 crore.
What was the reason for the withdrawal of FPI investors
In the financial year 2022-23, most of the major central banks started the process of increasing the interest rate, due to which money started coming out of India and other emerging markets. This led to an unprecedented increase in inflation in most economies. Globally tightening monetary stance, volatility in crude oil prices, high commodity prices and Russia-Ukraine conflict led to foreign capital outflows.
Apart from shares, FPIs also pulled out Rs 8,938 crore from the debt or bond market in the last financial year. Earlier in 2021-22, he had infused Rs 1,628 crore in the bond market.
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