4th consecutive month of FPIs outflows: January witnessed second-highest selling in last 20 months

For the straight fourth month, the Foreign Portfolio Investors (FPIs) have been sellers in January 2022 as its has registered an outflow of US$ 4.8 billion, taking the total net outflows for the past four months to US$ 9.6 billion since October 2021, a research report states.  

According to Motilal Oswal’s report, January has been the second-highest month with respect to FPIs outflow, the first is the Covid year of March 2020, which saw an outflow of US$ 8.4 billion. 

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In the last three months of 2021 – October, November, and December the FPIs outflows stood at US$2.3 billion, US$ 0.8 billion, and US$ 1.7 billion, respectively.  

On a year-on-year basis, these fourth months have seen an inflow with November and December maximum surge previous year that is 2020.  

Before this four months October-January, the two months of August and September had witnessed an inflow, while July had seen outflow of US$ 1.7 billion in 2021. 

According to PRIME Database group, the net outflows from foreign investors of a huge Rs 38,521 crore during the October-December quarter resulted in FPIs share declining to a 9-year low of 20.74 per cent as on December 31, 2021, from 21.46 per cent as on September 30, 2021. 

“Most notably, FPIs pulled out Rs 44,820 crore from Financial Services and Software sector during the quarter while investing Rs 20,334 crore in Retail,” the research report had said. 

Weak global markets, including inflation in US is seen as the reason for the FPIs selling pressure. Besides, the latest variant of Omicron is still somehow denting the sentiment of overall investors. 

The PRIME Database group report also states that despite FPIs selling in Indian markets, the share of foreign investors has increased from 16.03 per cent to 20.74 per cent quarter-on-quarter basis.