Foreign investors become net sellers of Indian assets for the second consecutive month


Foreign investors become net sellers in India for the second consecutive month

New Delhi:

Foreign Portfolio Investors (REITs) have withdrawn funds worth Rs 5,992 crore from Indian stock markets so far in October and turned net sellers for the second month in a row amid an index of the strong US dollar, a weak rupee and a tightening of monetary policy.

In September, they sold Rs 7,624 crore worth of shares in India, according to data from National Securities Depository Limited. So far in 2022, they have sold Rs 174,781 crore on a cumulative basis.

Except for July and August when they were net buyers, Foreign Portfolio Investors (REITs) have been selling stocks in Indian markets for a year now, which started in October last year for various reasons.

Tighter monetary policy in advanced economies, including growing demand for dollar-denominated commodities, and the strength of the US dollar have triggered a steady outflow of funds from Indian markets. Investors generally prefer stable markets during times of high market uncertainty.

In addition, the constant depreciation of the rupee and the depletion of Indian foreign exchange reserves have also affected the weak market sentiments.

India’s foreign exchange reserves have been depleted for months now due to the likely intervention of RBI in the market to defend the depreciating rupee.

On Wednesday, the rupee crossed the 83 mark for the first time in its history. So far this year, the rupee has depreciated by around 11-12%, according to market data.

india foreign exchange reserves in the week ending October 14 fell to a more than two-year low of $528.367 billiondown $4.5 billion from the previous week.

For the record, foreign exchange reserves have shrunk by about $100 billion since Russia invaded Ukraine in late February, when imports of energy and other raw materials became more expensive globally.


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