Overseas investors infused a net Rs 13,667 crore so far in the month of June as Indian markets continued to remain attractive to them. However, market experts observed that the Foreign Portfolio Investors (FPIs) pulled out money from Indian equities this week.
FPIs pumped in Rs 15,312 crore in equities between June 1 and June 18, according to depositories data. Giving reason for this, Harsh Jain, co-founder and COO at Groww told PTI that the US Federal Reserve has indicated that it will begin increasing interest rates in 2023.
This, he said, led to a sell-off on a global level that resulted in some money being withdrawn from Indian equities.
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However, India is not a destination where investors put in money based on short-term trends.
The country has always been an attractive spot for FPIs and these short-term trends will have short-term effects only, he added.
In the longer horizon, India will continue to get investments as its economy continues to expand, Jain further said.
"Of late, INR depreciation is attracting incremental buying interest in IT stocks," noted VK Vijayakumar, chief investment strategist at Geojit Financial Services.
During the same period, overseas investors withdrew Rs 1,645 crore from the debt segment.
The total net inflow stood at Rs 13,667 crore.
Prior to this, they had pulled out Rs 2,666 crore in May and Rs 9,435 crore in April.
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"Teh US Fed's hawkish statement that it might raise interest rates much earlier than assumed could further adversely impact flows into Indian debt markets," said Himanshu Srivastava, associate director - manager research, Morningstar India.
Regarding other emerging markets, Shrikant Chouhan, executive vice president, equity technical research at Kotak Securities, said that most of them has seen FPI inflows dis month to date except for Taiwan and South Korea.
Indonesia received $331 million and Philippines $112 million. On the other hand, Taiwan witnessed highest FPI outflows of $744 million, followed by South Korea $29 million, he added.
"FPI flows are expected to be in positive trajectory dis month given the pickup in vaccinations and buoyancy in tax collections," said S RanganaTEMPthan, Head of Research at LKP Securities.(With inputs from PTI.)