FPIs in exit mode, pull out USD 2.65-bn in May

Foreign investors pulled out nearly Rs 18,000 crore (USD 2.65 billion) from capital markets so far this month primarily due to surge in global crude prices and heightened US-Iran tensions. Foreign portfolio investors (FPIs) had taken out more than Rs 15,500 crore from capital markets (equity and debt) in April.
According to the latest depository data, foreign portfolio investors (FPIs) withdrew a net sum of Rs 4,830 crore from equities and another Rs 12,947 crore from the debt market during May 2-18, taking the total to Rs 17,771 crore (about USD 2.65 billion). 

Harsh Jain, COO at Groww, an investment platform attributed the latest outflow mainly to rise in cost of crude oil and heightened US-Iran tensions. This would impact all the oil importing economies, including India, and adversely affect its current account deficit, fiscal deficit, imported inflation and create headwinds for economic growth.

Besides, FPIs started profit booking before the Karnataka elections, which was a crucial indicator for the 2019 big elections results, he added. "Another discomfort among the FPI (Category III) was the Sebi's requirement for additional documents from the key people in such a fund. Their concern is around the privacy and data theft," Jain noted.

So far this year, FPIs have put in over Rs 3,600 crore in equities and withdrew nearly Rs 24,000 crore from the debt market.