MUMBAI: The pace of fund outflows by foreign portfolio investments from India seems to have somewhat slowed in July. So far in July, the foreign investors have sold equities worth Rs 4,096 crore, which is comparatively much lower than the previous months' trends.
In June, they sold Rs 50,203 worth of equities in India, whereas it was Rs 39,993 in May. FPIs have been persistently selling equities in the Indian markets for the past nine-to-ten months due to various reasons, including tightening of monetary policy, rising current account deficit on account of depreciation of the rupee, and rising dollar and bond yields in the US.
FPIs typically prefer advanced economies in times of sharp volatility and uncertainty in the overall financial markets. So far in 2022, FPIs sold equities worth Rs 221,454 crore, data showed. During the same period, Sensex and Nifty declined around 8-10 per cent each.
"FPIs are selling more in countries with rising current account deficits like India because the currencies of such countries are vulnerable to further depreciation. Towards the end of June FPI selling has been showing a declining trend," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, had said.
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