Due to the continuous rise in dollar prices and the growth of the American bond market, foreign investors are continuing to withdraw from India. In the first week of October, foreign portfolio investors have withdrawn Rs 8000 crore from the Indian stock market in just one week in the month of October. Earlier in the month of September, he had withdrawn Rs 14,767 crore from the Indian market.
In fact, the dollar index continues to remain strong. Due to this, there is continuous selling by FII investors from the Indian market. However, before this, in the last 6 months, he had shown a lot of confidence in the Indian market. During this period, FPI had invested about Rs 1.74 lakh crore in the Indian stock market.
Dollar is becoming a villain
According to VK Vijayakumar, analyst at Geojit Financial Services, in view of the strength of the dollar and US bond yields in the coming time, FPIs are not likely to become buyers in the market any time soon. According to the data, FPIs have sold shares worth Rs 8,000 crore this month till October 6. However, India still remains an economy attracting foreign investors this year. But the continuous strengthening of the dollar has spoiled the equation.
Problems will increase due to global tension
According to Himanshu Srivastava, Director of Morningstar India, this sell-off can be attributed to economic uncertainties in the US and Eurozone as well as growing concerns about global economic growth. Apart from this, due to high crude oil prices, stable inflation figures and the fear that interest rates will remain high for longer than expected, foreign investors have adopted a wait and see attitude. In such a situation, now the eyes are fixed on crude oil and dollar. At the same time, the below normal monsoon in India and its impact on inflation is also a matter of concern for the domestic economy.
Here is a positive sign
During this period, foreign investors invested Rs 2,081 crore in the country’s bond market. With this, till now this year the total investment of FPI in equity has exceeded Rs 1.12 lakh crore and in bond market has exceeded Rs 31,200 crore. Which is a positive sign. If the dollar and crude oil do not act as villains, the confidence of foreign investors in the Indian economy may increase.
Source: www.tv9hindi.com
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