FPIs take out ₹25,586 crore from equities in May on poll jitters, attractive valuations in China
The HinduForeign investors pulled out a massive ₹25,586 crore from Indian equities in May due to uncertainty surrounding the outcome of general election and outperformance of Chinese markets. This was way higher than a net outflow of over ₹8,700 crore in April on concerns over a tweak in India's tax treaty with Mauritius and a sustained rise in U.S. bond yields. The relatively high valuations and weak earnings, particularly in the financial and IT sectors where FPIs have a high allocation, along with political uncertainties such as ambiguity around the outcome of elections, global risk-off sentiment, and the appeal of Chinese markets, have led to FPI selling, Vipul Bhowar, Director of Listed Investments at Waterfield Advisors, said. "These factors suggest that monthly FPI inflows could exceed a sustained ₹30,000 crore if the current government remains in power," Kislay Upadhyay, smallcase manager & Founder of FidelFolio, said.