On one hand foreign investors continue to lap up Indian equities and on the other they are selling India's debt. As per data from the National Securities Depository Ltd, global funds in total have sold India's corporate and sovereign bonds worth Rs. 8,950 crore or $1.3 billion so far in April month. In contrast, they bought debt worth Rs. 16,640 crore in the previous month.
Some of the reasons attributed for the outflow of funds from India's debt market include less dovish stance of the RBI in comparison to what many had expected, increase of treasury yield in the US markets and increased oil prices.
The redemptions have been the highest in the category of corporate debt, which saw outflows worth Rs. 7,400 crore. In contrast, last month after RBI eased rules in respect of foreign investments into company bonds, the inflow into the category was to the tune of Rs. 14,770 crore.