INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Foreign investors have pumped in close to Rs 4,000 crore in the Indian capital markets this month so far on strengthening rupee
and easing global crude oil prices.
This comes following a 10-month high net inflow of over Rs 12,266 crore in the capital markets (equity
and debt) by Foreign Portfolio Investors (FPIs) in November.
According to data available with the depositories, FPIs infused a net amount of
Rs 1,332 crore in equities and Rs 2,552 crore in the debt markets, taking the total to Rs 3,884 crore during December 3-21.
Marketmen
attributed the inflow to persistent fall in crude oil prices, which dropped to over 15-month lows, and strengthening rupee against the
dollar.
However, till December 7, FPIs were net sellers in the equity market, pulling out funds to the tune of Rs 383 crore
However, they had put in Rs 2,744 crore in the debt markets during the period under review.
"The sell-off was triggered on December 6, when
FPIs sold net assets worth Rs 361 crore in a single day
This could be largely attributed to the weakness in the global markets due to the arrest of a high-profile Chinese executive which led to a
sharp fall in the stock markets globally," said Himanshu Srivastava, Senior Analyst Manager Research, Morningstar Investment Adviser
India.
"Investors fear that the relationship between the world's two biggest economies -- US and China -- could deteriorate following the
arrest and hurt economic growth
Consequently, they chose to adopt a cautious stance and shun risky assets, such as their investments in emerging markets like India, which
are more susceptible to weak global cues," he added.
The sell-off by FPIs was triggered after Chinese telecom giant Huawei's CFO Meng
Wanzhou, who is also the company founder's daughter, was arrested in Canada for extradition to the US for suspected Iran sanctions
violations.
FPIs have pulled out over Rs 84,200 crore from the capital markets so far this year
This includes close to Rs 34,000 crore from equities and Rs 50,200 crore from the debt market.
