2 years, 10 months ago

Explained | Why are FPIs dumping Indian stocks?

The story so far: Foreign portfolio investors have been on a selling spree in India. May figures of about ₹44,000 crore formed the highest monthly quantum of sell-off since March 2020 when India announced a nationwide lockdown. Promise of attractive returns on the back of economic growth draws investors including FPIs into a country’s markets. Likewise, FPIs withdrew ₹1.18 lakh crore in March 2020 alone — the month when India announced a nationwide lockdown, triggering concerns around economic growth. FPIs also show keenness to invest in bonds when there is a favourable differential between the real interest rates on offer in the country they aim to invest in, and other markets, but more specifically, compared with the largest economy in the world, the U.S. Why have FPIs been selling India holdings?

The Hindu

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