Shrikant Chauhan, Head of Equity Research (Retail), Kotak Securities said, “FPIs will remain volatile going forward. FPIs continue to be sellers in emerging markets due to geopolitical tensions, rising inflation, tightening of monetary stance by central banks. As per the data, FPIs have pulled out a net Rs 31,430 crore from the Indian stock markets this month till June 17. FPI selling continues since October 2021.
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “Global investors are reacting to the rising risk of recession across the world. The Federal Reserve has increased interest rates by 0.75 percent amid rising inflation. The US central bank has indicated to take a tougher stance going forward.
He said that FPIs are mainly selling on the back of a strengthening dollar and rising yields on bonds in the US. The Federal Reserve, the Bank of England and Switzerland’s central bank have raised interest rates. As a result, FPIs are shifting from stocks to bonds.
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Vijay Singhania, Chairman, TradeSmart, said, “In such a scenario of uncertainty, when bonds offer safety of capital and better returns, investors are sure to sell. The US markets have seen the biggest weekly decline since March 2020.
He said inflation on the domestic front is a matter of concern and the Reserve Bank is increasing policy rates to check it. At the same time, Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, believes that after the aggressive increase in interest rates by the Federal Reserve, the Reserve Bank will also increase policy rates in the next two-quarters.
