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FPI: Why is there so much decline in the domestic market, know whether this trend will continue next week too

Foreign Portfolio Investors: Foreign investors are continuously withdrawing money from the stock market. The process of FPI withdrawal continued this week as well, due to which there is a continuous decline in the domestic market. FPIs have pulled out more than Rs 35,000 crore from Indian markets so far this month.

Why are FPIs selling continuously?
The US central bank has increased interest rates, after which the decline in the domestic market dominates. Let us tell you that due to the increase in interest rates and the strengthening of the dollar, FPIs remain sellers in the Indian market.

1.65 lakh crore withdrawn so far in 2022
Let us tell you that FPIs have withdrawn Rs 1.65 lakh crore from Indian markets so far in 2022. Shrikant Chauhan, Head of Equity Research, Kotak Securities, said that due to higher crude oil prices, inflation, tighter monetary stance and other factors, the outlook of FPIs will remain volatile.

Selling will continue even further
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “With major market weakness in the US and dollar strengthening, FPI sell-off will continue.”

Selling between 11 to 13 April
Foreign investors have been net sellers in the Indian market for seven consecutive months till April 2022. During this, he has made a net withdrawal of more than Rs 1.65 lakh crore. FPIs had invested Rs 7,707 crore in shares in the first week of April after selling for six consecutive months, but after that they once again became sellers in the week of short trading sessions from April 11 to 13. The same trend continues in the coming weeks as well.

Fed Reserve hiked 2 times
According to depository data, FPIs have withdrawn Rs 35,137 crore from Indian equities between May 2 and 20. Morningstar India associate director-manager research Himanshu Srivastava said foreign investors are worried about the possibility of a more aggressive rate hike by the US central bank going forward. The Federal Reserve has raised interest rates twice this year.

Withdraw Rs 6,133 crore
Apart from equities, FPIs have pulled out a net Rs 6,133 crore from the loan or bond market during the period under review. Apart from India, FPIs have also withdrawn from other emerging markets like Taiwan, South Korea, Indonesia and Philippines.

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