Adopting cautious approach amid US-Iran tensions, FPIs pull out Rs 2,416 cr from Indian capital markets by Jan
Total Views |
New Delhi, January 13: Adopting a cautious approach amid the US-Iran tensions, foreign portfolio investors (FPI) have pulled out around sum of Rs 2,416 crore from the Indian capital markets in January so far. As per latest depositories data, FPIs invested a net amount of Rs 777 crore in equities and pulled out around Rs 3,193 crore from the debt segment between January 1-10. This translates into a cumulative net outflow of Rs 2,416 crore.
Overseas investors have turned net sellers in January after remaining buyers for four consecutive months since September 2019. However, both the US and Iran have shown their intentions to de-escalate military tensions. This may result in the rebuilding of risk-on sentiment which may be positive for foreign flows into Indian equity markets going ahead.
A foreign portfolio investment is a grouping of assets such as stocks, bonds, and cash equivalents. Portfolio investments are held directly by an investor or managed by financial professionals. FPIs are currently nibbling a few
shares just to maintain their asset allocation weights in the portfolio towards Indian equities.
Foreign portfolio investment consists of securities and other financial assets held by investors in another country. It does not provide the investor with direct ownership of a company's assets and is relatively liquid depending on the volatility of the market. Along with foreign direct investment, FPI is one of the common ways to invest in an overseas economy. FDI and FPI are both important sources of funding for most economies.