FPIs pull out Rs.18,856 crore from Indian markets in February so far

Foreign portfolio investors (FPIs) have withdrawn a net Rs.18,856 crore from the Indian markets in February so far amid geopolitical tensions and chances of a rate hike by the US Federal Reserve.

As per depositories data, overseas investors took out Rs.15,342 crore from equities and Rs. 3,629 crore from the bonds market between February 1-18. At the same time, they invested Rs.115 crore in hybrid instruments.

This translates into a net outflow of Rs.18,856 crore during the period under review.

This is the fifth consecutive month of foreign fund outflows.

Shrikant Chouhan, Head - Equity Research (Retail), Kotak Securities, said investors shifted to defensive sectors and safe havens such as bonds and gold as tensions flared between the US and Russia over Ukraine.

FPIs can be expected to sell more going forward, unless market corrections make valuations attractive, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Domestic institutional investors and HNIs are slowly accumulating high quality financials whose valuations have turned attractive due to sustained FPI selling, he added.