Despite heavy fund infusion by FPIs over the past two month, the domestic financial market suffered a foreign fund outflow of over Rs 44,500 cr on net basis in the fiscal 2018-19 as macroeconomic headwinds weighed on investor sentiment through the year.
New Delhi:
In comparison, FPIs had infused a net amount of Rs 25,634 cr in the equities and over Rs 1,19,035 cr in the debt market, a total net investment of Rs 1,44,669 cr in the previous fiscal.
“After two years of good foreign fund inflows, Indian market witnessed reversal in the trend. We received Rs 48,411 cr and Rs 1,44,682 cr in the year 2016-17 and 2017-18, respectively. Global and domestic causes alike have prompted the flows of funds in 2018-19 from the markets and both the equity and debt segments have witnessed outflows”, Alok Agarwala, Senior VP and Head Investment Analytics, of Bajaj Capital said.
Hike in rates by the US Federal Reserve, depreciating rupee, rise in crude oil prices, worsening current account deficit, concerns over fiscal deficit and current account deficit target, coupled with trade tiff between the US and China dampened the mood in emerging markets, experts said. In financial year 2018-19, foreign portfolio investors (FPIs) pulled out a net sum of Rs 1,629 cr from equities and Rs 42,951 cr from the bonds market, taking the total net outflow to Rs 44,580 cr, the depositories data showed.
In comparison, FPIs had infused a net amount of Rs 25,634 cr in the equities and over Rs 1,19,035 cr in the debt market, a total net investment of Rs 1,44,669 cr in the previous fiscal.
“After two years of good foreign fund inflows, Indian market witnessed reversal in the trend. We received Rs 48,411 cr and Rs 1,44,682 cr in the year 2016-17 and 2017-18, respectively. Global and domestic causes alike have prompted the flows of funds in 2018-19 from the markets and both the equity and debt segments have witnessed outflows”, Alok Agarwala, Senior VP and Head Investment Analytics, of Bajaj Capital said.