Amid the COVID-19 pandemic, foreign portfolio investors (FPIs) have withdrawn a net of Rs 10,347 crore in April, so far, from the Indian capital markets.
Between 1 and 24 April, the overseas investors pulled out a net sum of Rs 6,822 crore from equities and Rs 3,525 crore from the debt segment as per data with the depositories. The total net outflow stood at Rs 10,347 crore.
It is, however, an improvement over the quantum of outflows seen in March, where FPIs had withdrawn a record Rs 1.1 lakh crore on a net basis from the Indian equity and debt markets.
While measures taken by the Indian government to contain the spread of virus, relief package, and liquidity measures from the Reserve Bank of India (RBI) are resonating well with investors, FPIs may adopt a wait-and-watch approach on the markets as risks remain.
The emerging markets are generally considered risky investment destinations that are prone to high volatility.
While the world continues to stare at a global economic slowdown due to the damage from measures taken to curb the spread of the coronavirus, FPIs may look at emerging markets like India for short-term bets and drift largely towards safe-haven assets like US dollars and gold.
Until the pandemic is under control and the real degree of damage on businesses and economies is ascertained, the volatility is likely to continue in the Indian markets.