Between April 1-24, foreign portfolio investors (FPI) pulled out a net sum of Rs 6,822 crore from equities and Rs 3,525 crore from the debt segment, depositories data showed. The total net outflow stood at Rs 10,347 crore.
“The sharp drop in the quantum of net flows could be attributed to India gaining prominence among foreign investors for doing well with regards to containing the COVID-19 pandemic from spreading aggressively,” said Himanshu Srivastava, senior analyst manager research, Morningstar India.
In addition to that, measures announced by the government and the RBI periodically to revitalize the sagging economy would also be resonating well with investors, he added.
As per Srivastava, though the slowdown in the quantum of net outflow is a positive indicator, it would be early to consider it as a precursor to a change in trend.
The scenario continues to be grim as far as Covid-19 pandemic is concerned. The world is staring at a global economic slowdown and a prolonged fight against coronavirus. The degree of damage that it can have on the global economy, businesses and markets worldwide is yet to be accurately ascertained, he added.
Considering the domestic situation, Sousthav Chakrabarty, CEO and director of Capital Quotient said “all in all, one needs to keep a keen eye on daily FPI and DII (domestic institutional investors) movements. With issues such as those related to Franklin Templeton, faith in large institutions and listed avenues for parking funds has been shaken, and this too will contribute to higher volatility going forward. There is still much pain to be overcome before we see greener pastures.