Coronavirus scare: FPIs pull out over Rs 1 lakh cr in March

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Published: March 29, 2020 11:35:58 AM

In order to contain the spread of coronavirus, lockdowns have become a norm world over and have led the FPIs to adopt a cautious stance, market experts said.

Coronavirus scare, global recession, FPI, Indian capital markets, coronavirus outbreak, FPI flowsThe depositories data showed that a net amount of Rs 59,377 crore was pulled out from equities and Rs 52,811 crore was withdrawn from the debt segment by foreign portfolio investors (FPIs) between March 2-27.

As the coronavirus pandemic is triggering fears of a global recession, foreign investors have started rowing back from the Indian capital markets by withdrawing a massive over Rs 1 lakh crore in March after remaining net buyers for six consecutive months.

In order to contain the spread of coronavirus, lockdowns have become a norm world over and have led the FPIs to adopt a cautious stance, market experts said.

The depositories data showed that a net amount of Rs 59,377 crore was pulled out from equities and Rs 52,811 crore was withdrawn from the debt segment by foreign portfolio investors (FPIs) between March 2-27.

In the current scenario, FPIs have preferred to take a flight to safer investment options, such as dollar denominated asset classes and gold, as against investing in fixed income securities of emerging markets like India, he said.

Regarding the future of FPI flows, he said the situation should stabilize as and when there are visible signs of coronavirus coming under control.? However, until then, this will continue to be one of the major focus areas for FPIs, since it may have a more serious impact on the already slowing global economy.

According to Harsh Jain, co-founder and COO, Groww, “measures announced by the Finance Minister and RBI are encouraging but we will have to wait and see what impact it will have. We have to keep an eye on future announcements and their effects on the economy.”

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