COVID-19 second wave: FPIs net sellers of Indian stocks worth Rs 6,452 cr in May so far

Overseas investors pulled out Rs 6,452 crore so far in the month of May from Indian markets amidst toppling investor sentiment in the wake of the second of the COVID-19 pandemic.

Foreign Portfolio Investors (FPIs) pulled out Rs 6,427 crore from equities and Rs 25 crore from the debt segment between May 1-14, according to depositories data.

The net outflow during the period under consideration stood at Rs 6,452 crore. The total net outflow in the previous month from the Indian capital markets, equities and debt, was Rs 9,435 crore.

Also Read: FPIs pull out Rs 5,936 cr from equities in May amid raging 2nd COVID-19 wave

"The severe COVID second wave, increasing lockdowns and concerns regarding its impact on GDP growth and corporate earnings seem to be behind FPI outflows," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services told PTI.

The real impact on the economy is unclear, but investors are becoming nervous and cautious, said co-founder and COO at Groww Harsh Jain.

FPIs are now running a concentrated portfolio with high weightage in IT, pharma, select FMCG, and stocks with good earnings visibility, Vijayakumar noted.

Also Read: Mutual Funds on buying spree for 2nd straight month; invest Rs 5,526 cr in stocks in April

"Rising COVID cases in the country and extension of lockdowns could play spoilsport. Moreover, the uncertainty over the degree of impact on the economy could continue to keep foreign investors on the sidelines and can also potentially force FPIs to adopt a wait-and-watch approach," said Himanshu Srivastava, associate director - manager research, Morningstar India.

The focus for FPIs will continue to be on economic numbers and how soon India gains its economic momentum back. Any surprise on that front can dent sentiments further and adversely impact foreign flows, Srivastava added.