Overseas investors pulled out over Rs 83,000 crore from the capital markets in 2018, after pouring in a record Rs 2 lakh crore in the preceding year, on the back of rate hikes in the US, rise in global crude prices and rupee depreciation. Moreover, the flows are expected to be range-bound in 2019 as FPIs may continue with a cautious stance until there are concrete signs of economic recovery and certainty over the formation of a stable government after the general elections, said Himanshu Srivastava, a senior analyst at Morningstar Investment Adviser. Foreign portfolio investors (FPIs) made a net withdrawal of about Rs 83,146 crore from the Indian markets in 2018. This comprises Rs 33,553 crore from equities and Rs 49,593 crore from the debt market, according to data available with depositories. This was the worst year for Indian capital markets in terms of overseas investment since 2002, the last year for which segregated FPI data for equity and debt markets are available. "Rate hikes in the US and reshuffling of portfolio money across the globe, rupee depreciation and crude rise were all contributors for higher FPI pull out," said Vidya Bala, head of mutual fund research at FundsIndia.com. "India also lost to emerging markets in terms of foreign money allocation given the lower valuations in other markets at the beginning of 2018. Added to this, the uncertainty on the domestic political front, ahead of an election year, may also have contributed to FPIs staying on the sidelines," she added. Before 2018, FPIs were net buyers of Indian equities for six consecutive years. They had made net inflows of over Rs 51,000 crore in 2017, Rs 20,500 crore in 2016, Rs 17,800 crore in 2015, Rs 97,000 crore in 2014, Rs 1.13 lakh crore in 2013 and Rs 1.28 lakh crore in 2012. Prior to that, FPIs had pulled out money from the Indian stock market in 2011. Before that, FPIs had turned net sellers in 2008. For the debt market, FPIs made a net withdrawal of over Rs 43,600 crore in 2016, but it turned around in a big way in 2017 with a net inflow of Rs 1.5 lakh crore. Even in 2018, FPIs begun on a positive note by pumping in money, but the trend got reversed soon amid weak global cues and introduction of long-term capital gains tax on equity investments. After a brief recovery in March, the sell-off continued for most part of the year. Bajaj Capital CEO Rahul Parikh said, "The year 2019 will be the first year since 2008 when globally, central banks will withdraw liquidity worth about USD 1 trillion. Add to that the escalating trade war between US and China and the Brexit conundrum, and you have a near perfect recipe for a volatile 2019." Slowing corporate earnings growth, optically expensive index level valuations, concerns over bad asset quality in banks, slowdown of credit flow to NBFCs and uncertainty over outcome of general elections in 2019 will impact the FPI inflows, he added.