Share Market: Foreign investors are disillusioned with the Indian stock market! Rs 14,767 crore withdrawn in September

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Share Market: Foreign investors are once again withdrawing their money from the Indian stock market. Earlier in the month of August also, investors had made huge withdrawals. It is being told that during the selling in the month of September, foreign investors have withdrawn about Rs 14,767 crore. Amidst the strengthening of the dollar, rising bond yields in America and rising crude oil prices, foreign portfolio investors (FPIs) appeared to be becoming disillusioned with the Indian market. In the month of August, FPI inflows fell to a four-month low of Rs 12,262 crore after foreign portfolio investors withdrew money from the market. Whereas, FPIs were net buyers of Indian shares for six consecutive months from March to August. During this period he had bought shares worth Rs 1.74 lakh crore.

Why are foreign investors withdrawing money

The strengthening of the dollar against the rupee, increase in bond yields in America and rise in crude oil prices are being said to be the biggest reasons for foreign investors withdrawing money. At the same time, Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said that apart from economic uncertainty in the US and Eurozone, FPIs are also selling due to increasing concerns about global economic growth. Due to these conditions FPIs are avoiding taking risks. He said that apart from this, high crude oil prices, inflation figures and rising interest rates are also affecting the sentiment of FPIs. According to the data, during the period under review, FPIs have injected Rs 938 crore into the debt or bond market. Thus, in the current calendar year so far, FPI investment in shares has been Rs 1.2 lakh crore. At the same time, he has invested more than Rs 29,000 crore in the bond market.

How will the future market be?

Mayank Mehra, Manager-Smallcase and Principal Partner, Craving Alpha, said that FPI inflows into Indian markets will remain uncertain going forward. To a large extent, it will depend on the performance of the Indian economy, the monetary review of the Reserve Bank and the September quarter results of the companies. According to depository data, foreign portfolio investors sold shares worth a net Rs 14,767 crore in September. Earlier in August, FPI inflow into shares had fallen to a four-month low of Rs 12,262 crore. At the same time, FPIs were net buyers of Indian shares for six consecutive months from March to August. During this period he had bought shares worth Rs 1.74 lakh crore. VK Vijayakumar, chief investment strategist of Geojit Financial Services, said that FPIs are selling due to the strength of the dollar. The dollar index is near 107. Apart from this, bond yield in America (4.7 percent for 10 years) remains attractive, hence FPIs remain sellers. The price of Brent crude oil is at $97 per barrel. This is also a reason for selling by FPIs.

What is foreign portfolio investment

Foreign portfolio investment is an economic system in which individuals or organizations choose to pursue foreign financial ventures and investments. It involves investing capital in various financial enterprises, such as shares, bonds, properties, foreign currencies (Forex) etc. Foreign portfolio investment carries both risks and benefits, and it is extremely important to consider it judiciously. These may be the benefits and potential risks of foreign portfolio investment.

Benefit

• Diversification: It provides an option to invest in different departments and enterprises, thereby diversifying one’s investments.

• Referred Profit: At some times, investments in foreign markets may yield more profit than can be earned in foreign currency.

• Prudent stance: If a person or organization thinks that the foreign market is good as compared to the Indian markets, then they can invest there.

risk

• Foreign exchange rates risk: Investors may suffer losses due to changes in foreign exchange rates.

• Political and economic tensions: Foreign markets may be at risk of being affected by political and economic tensions.

• Foreign exchange rates risk: Sudden changes in foreign exchange rates can affect investors.

How do foreign investors invest?

Foreign portfolio investment is a type of investment in which individuals or investors invest in foreign markets. This includes individuals investing in foreign joint investment vehicles, such as foreign stocks, foreign bonds, foreign mutual funds, foreign ETFs (Exchange-Traded Funds) Can invest in etc. The main objective of foreign portfolio investment is to increase financial diversification and investment opportunities for investors. This helps to diversify their portfolio and allows them to take advantage of movements in global markets. There are many types of foreign investors.

• Foreign Stocks: This involves buying and selling foreign shares. This can be done through stocks of different companies in the foreign markets of a country.

• Foreign Bonds: Through foreign bonds, investors give loans to foreign governments or companies and collect interest from them.

• Foreign Mutual Funds: Foreign mutual funds distribute investors’ money across various foreign investments and are managed by professional fund managers for investors.

• Foreign ETFs: Foreign ETFs offer competitive value addition to foreign stock market indexes.

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