Rs 11.4k-cr fraud, global cues spur Rs 10k-cr FPI sell-off in Feb

Foreign investors have pulled out nearly Rs 10,000 crore ($1.5 billion) from the Indian stock market so far this month primarily due to PNB fraud jitters coupled with global cues.

This is against the total inflow of over Rs 13,780 crore by foreign portfolio investors (FPIs) in January, latest data with the depositories showed.

Geojit Financial Services Head of Research Vinod Nair said weak domestic cues impacted investors' sentiment.

Besides, renewed concerns that a rebound in global crude oil prices will have an adverse impact on fiscal deficit too kept market participants cautious, he added.

According to depositories data, FPIs withdrew a net amount of Rs 9,899 crore ($1.5 billion) from equities during February 1-23. However, they put in over Rs 1,500 crore in the debt markets during the period under review.

“In January, the US unemployment rate stood at a 17-year low of 4.1 per cent. In addition to this, there is a good possibility of an increase in the US Federal Reserve rate to counter the rise in inflation. Overall, we witnessed a sell-off globally. The FPI pullout from Indian markets is most likely a result of this,” Harsh Jain, co-founder and COO of online investment platform Groww, said.