CNBCTV18 - Foreign investors have pulled out a net of over ₹17,000 crore this month so far due to the attractiveness of the Chinese markets and the cautious stance adopted by them ahead of the Union Budget and US Federal Reserve meeting. The outflow in January came after a net inflow of ₹11,119 crore in December and ₹36,239 crore in November. Read more
According to the data with the depositories, FPIs have made a net withdrawal of ₹17,023 crore this month (till January 27).
FPIs are adopting a cautious stance, as they are apprehensive ahead of the US Federal Reserve meeting and the Union budget on February 1. The Fed's monetary policy committee will meet from January 31 to February 1.
FPI's have been focusing on China after its markets reopened after the lockdown. Under its zero COVID policy, China was enforcing rigorous lockdowns to reduce the number of cases. As a result, Chinese markets declined, making them more appealing from a value standpoint.
This caused FPIs to shift their focus from economies with relatively high valuations like India to China. Additionally, a weak global economic growth outlook has raised concerns about the US economy entering a recession.
FPI strategy in January has been selling in India and buying in relatively cheaper markets such as China, Hong Kong, South Korea and Thailand.
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