Coronavirus scare: FPIs press panic button, withdraw Rs 37,976 crore from Indian markets

By: |
Updated: March 15, 2020 12:14:52 PM

Foreign portfolio investors (FPIs) have withdrawn a whopping Rs 37,976 crore on a net basis from the Indian markets in March so far amid the coronavirus pandemic triggering fears of a global recession.

global economy, china, coronavirus, nitrogen dioxide, Lower carbon footprint, power consumption, paracetamol, coronavirus pandemicOverseas investors pulled out a net sum of Rs 24,776.36 crore from equities and Rs 13,199.54 crore from the debt segment between Mar 2-13, depositories data showed.

Foreign portfolio investors (FPIs) have withdrawn a whopping Rs 37,976 crore on a net basis from the Indian markets in March so far amid the coronavirus pandemic triggering fears of a global recession. Overseas investors pulled out a net sum of Rs 24,776.36 crore from equities and Rs 13,199.54 crore from the debt segment between Mar 2-13, depositories data showed.

This translates into a total net outflow of Rs 37,975.90 crore during the period under review. Prior to this, foreign investors were net buyers for six consecutive months since September 2019. “The spread of coronavirus outbreak, which has now been declared a pandemic, and continued slowdown in the global economy, has created a vicious cycle which is consuming investors worldwide,” said Himanshu Srivastava, senior analyst manager research, Morningstar Investment Adviser India.

Global markets reeled last week after the World Health Organization (WHO) declared the coronavirus outbreak a pandemic, and expressed deep concern over the “alarming levels of inaction”. Given the ongoing scenario, foreign investors have taken a flight to safer investment options, such as dollar-denominated asset classes and gold as against fixed income securities of emerging markets like India, he added.

Coronavirus latest updates: PM Modi to hold talks with SAARC leaders

Going forward, as coronavirus crosses boundaries and affects other countries, it may have a more serious impact on the already slowing global economy and on foreign flows into emerging markets such as India, Srivastava said.

“The markets have been very volatile all over the globe. Many countries are expected to announce stimulus packages and tax breaks to support various industries as they deal with the effects of this virus’ outbreak. When such announcements are made, investors’ sentiments are expected to change,” said Harsh Jain, co-founder and COO at Groww.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1GST rates hiked to 18%, mobile phones to pinch your pocket more
2Lower GST rate on aircraft MRO to boost local business, say service operators
3GST Council discuss coronavirus impact on economy