FPIs sell $1 billion equities in December, 2016

By: | Published: December 31, 2016 6:48 AM

Foreign portfolio investors (FPIs) have sold equity shares worth more than $1 billion in December, amid concerns over the impact of the government's decision to withdraw high denomination notes.

Foreign portfolio investors, FPI, Donald Trump administration, DemonetisationForeign portfolio investors (FPIs) have sold equity shares worth more than billion in December, amid concerns over the impact of the government’s decision to withdraw high denomination notes. (Source: Reuters)

Foreign portfolio investors (FPIs) have sold equity shares worth more than $1 billion in December, amid concerns over the impact of the government’s decision to withdraw high denomination notes in November and the policies of Donald Trump administration which will take charge in January.

Foreign portfolio investors have sold stocks worth $3.6 billion till date from the beginning of October. Though overseas investors were net sellers in the past three months and the first two months of the calendar year 2016, they were net buyers of equities worth $3 billion during the year.

The hike in the US Fed rates on December 14, and expectation of more hikes in 2017 have led to a rally in the US dollar, making Indian equities less attractive to foreign buyers.

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However, markets such as Taiwan and South Korea have attracted more foreign flows than India this year. Taiwan has attracted the highest inflows of $10.9 billion, followed by South Korea which has pulled in $10.4 billion. Indonesia, however, hasn’t been a big destination with inflows of $1.25 billion moving into its equity markets.

Market participants said volatility will continue as earnings recovery of companies has been pushed further by a couple of quarters on demonetisation.

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