FPIs selling spree continues; withdraw Rs 6,500 cr in December

New Delhi: Continuing their selling spree, foreign investors have pulled out more than Rs 6,500 crore from the capital markets since beginning of the month on account of weak global cues.

The latest sell-off comes after Foreign Portfolio Investors (FPIs) withdrew Rs 10,826 crore from the capital markets (equity and debt) last month. Prior to that, overseas investors had infused a staggering Rs 22,350 crore in October.

As per the data compiled by the depositories, net outflow in equities stood at Rs 3,949 crore during December 1-23, while the same for the debt markets was at Rs 2,588 crore taking the total to Rs 6,537 crore.

With a couple of trading days still left for this month, experts believe the final tally for the equities may be even worse as foreign investors have lately been on a selling spree. The capital poured in by the FPIs is often been called 'hot money' because of its unpredictability, but these overseas entities have still been among the most important drivers of Indian stock markets.

"Weak global cues like fall in crude oil prices has dampened sentiment," Hem Securities Director Gaurav Jain said. In addition, Reserve Bank's report painted a grim picture of lender's deteriorating asset quality and lacklustre corporate profit growth.

Besides, lingering uncertainty over passage of the key GST Bill has dampened investors' sentiment. So far this year, overseas investors have made a net investment of Rs 16,674 crore in equities and Rs 48,756 crore in debt markets.