- Foreign investors are withdrawing capital from emerging markets like India and putting it in safe ways
- The Sensex lost 4,187.52 points or 12.27 percent in the previous week.
Fearing a global slowdown due to the Corona virus, foreign portfolio investors (FPIs) pulled out more than Rs 1.08 lakh crore from the Indian capital market by selling shares and bonds so far this month (in March). A total of 15 trading sessions have been conducted in the market till 22nd of this month. During this period, there was no business in the market for a total of six days of the weekend and one day (on 10 March) on the occasion of Holi. Experts believe that foreign investors are selling risky assets and investing in properties considered safe. These assets considered safe include dollar-denominated assets and gold.
Foreign investors withdraw Rs 56,248 crore from the stock market
According to the depository data, foreign investors withdrew Rs 56,247.53 crore from the stock market on a net basis. In the debt segment, FPIs pulled out Rs 52,449.48 crore during this period. In this way, they made a net withdrawal of Rs 1,08,697.01 crore from the Indian capital market in a total of 15 trading sessions from March 2 to March 20. Earlier, in the six months since September 2019, FPIs remained investors in the Indian capital market. The Sensex lost 4,187.52 points or 12.27 per cent in the previous week ended March 20. The Nifty also lost 1,209.75 points or 12.15 percent.
Foreign investors prefer to increase investment in safe instruments like gold
Research analyst Himanshu Srivastava, Senior Analyst Manager, Morningstar Investment Advisor India, said that this year, a new corona virus epidemic suddenly spread across the world, causing a stampede in markets across the world. Due to this, large scale foreign investors are withdrawing their capital from emerging markets like India. In the current situation, foreign investors are preferring to increase investment in dollar denominated assets and safe investor instruments such as gold. The market will improve as soon as signs of corona virus infection decrease. Until then, however, investor attention will remain focused on this issue. Because the effect of coronavirus on the economy will be worse than other things. Experts believe that most of the resources are being spent to prevent the corona virus outbreak. Due to this, other economic activities are becoming sluggish.