Foreign investors have pulled out more than Rs 19,500 crore from the capital market this month so far amid rate hike by the US Federal Reserve and higher oil prices.

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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.

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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.

"This was further aggravated in November and continued in December due to several factors -- uncertainty over US ties with the emerging markets post Trump victory, the near-term impact on corporate earnings, and economic growth from demonetisation in the near term and impact of GST on firms' cash flows," FundsIndia.Com Head of Mutual Fund Research Vidya Bala said.

"In the debt market, FPIs have been net sellers in seven out of 11 months thus far. The rally in the Indian government securities and the decreasing spread between the US interest rates and India could be a reason; FPIs book profits in the gilt rally in India," she added.

This year, so far, FPIs have invested a net sum of Rs 27,600 crore in stocks, while they pulled out Rs 43,162 crore from the debt market, resulting in a combined net inflow of Rs 15,561 crore. 

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