FPIs pulled out $225 million a day from domestic stocks in 2022

The rupee, which breached 80 against the US dollar, intraday, on Tuesday, has faced sustained pressure on account of selling by overseas funds.

Foreign portfolio investors (FPIs) have sold at an average of $225 million (Rs 1,720 crore) each day from domestic stocks so far this year.

The intensity of selling is the highest-ever the Indian market has witnessed as FPI selling this year has neared $30 billion (Rs 2.3 trillion).

Besides weighing on the rupee and stocks, the sharp FPI selloff has deteriorated the macroeconomic situation.

India’s balance of payments (BoP) deficit was $16 billion during the March 2022 quarter, the second-most ever after the global financial crisis.

The rupee is down over 7 per cent year-to-date, while the benchmark equity gauge, the Nifty50, has declined 6 per cent.

However, it could have been worse if not for the support of domestic investors.

MFs have invested close to Rs 1.5 trillion into stocks so far this year.

Among emerging market (EM) peers, the FPI pullout from India is the worst after China and Taiwan.

Large commodity exporters such as Brazil and Indonesia have seen positive foreign flows this year despite a hawkish US Federal Reserve.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor