FPI bearish stand continues; foreign investors pull out over Rs 19,500 crore

New Delhi: Over Rs 19,500 crore have been pulled out from capital market this month so far by the foreign investors amid policy rate hike by the US Federal Reserve and increases oil prices.

Net withdrawal by foreign portfolio investors (FPIs) from equities stood at Rs 1,142 crore this month, while the same from the debt market was Rs 18,452 crore, translating into a total outflow of Rs 19,594 crore, depositories' data showed.

The FPI outflows took place following a withdrawal of over Rs 49,700 crore on net basis from the capital market (equity and debt) in last two months (October-November).

Prior to that, FPIs had poured in Rs 46,000 crore in the capital markets in preceding three months (July-September).

Market experts said that surge in oil prices globally following a landmark deal by Russia and other non-OPEC producers to join the Organisation of Petroleum Exporting Countries' (OPEC) decision to reduce output has impacted investors' sentiment.

Sentiment soured after the US Federal Reserve raised interest rate by 25 basis points on Thursday.

"The Fed rate hike was in the ballpark, but the outlook is hawkish with three hikes in 2017 against previous estimate of two, which has put pressure," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.

The pullout by FPIs started in October 2016 following uncertainty over US election results, and the similar trend was observed in other emerging markets.