Foreign investors withdraw large sum from Indian stock market in June
Major global investment firms have withdrawn a sizable amount of over 18 thousand crores from the Indian equity market so far in the month of June according to data from stock exchanges. The sell-off comes after a period of volatility where the market saw sharp falls and recoveries around the general elections results announcement period.
On the day the Lok Sabha election outcome was declared and indexes plummeted close to 6%, foreign portfolio investors pulled out a record high of more than 12 thousand crores from equities. The following day though indexes bounced back up over 3%, overseas money managers continued selling and withdrew over 5600 crores. Further selling of nearly 6900 crores took place on the subsequent session as well.
In comparison, domestic institutional investors such as mutual funds have invested a net total of approximately 6800 crores in shares over the past month. Analysts note that foreign investors have recently been reducing exposure to India citing expensive valuations and election uncertainties. Now that polling is over and a new government is in charge, experts expect these global players may start putting more money to work in the country going ahead.
Positive triggers like the budget, economic reforms and monetary policies could boost sentiment. If upcoming data points to robust earnings and rain gods favor agricultural production, overseas fund managers may upgrade profit projections of firms and direct fresh capital. Meanwhile, benchmark indexes recovered more ground on the latest session, closing nearly 1% higher backed by widespread buying across sectors.
