Foreign investors have pulled out more money from India this year than they brought in between 2009-2021. Foreign institutional investors (FIIs) have pulled out 2,15,000 crores in 2022 from India while in comparison of 2021, it was 91,000 crores. Experts believe that the withdrawal of capital is likely due to concerns about global economic conditions, rising interest rates and political instability.
This has led to a selloff the kind of which we have not seen before in Indian stock markets.
The reason for this sell-off is unclear, but some speculate that it is due to concerns over the country’s economic prospects. Others say that the global economy is sluggish, and that investors are pulling their money out of risky assets in order to protect themselves.
Either way, this sell-off is a worrying development for Indian investors. It means that they may not be able to invest as much money in the stock market as they would like. This could lead to a further decline in prices.
In the first five months of 2022, foreign investors have pulled out more money
Foreign institutional investors (FIIs) have pulled out more money in the first five months of this year than they brought in last 12 years between 2009 and 2021.
It was believed that 2022 could be the year of recover for the Indian economy, yet foreign investors seeing it differently. As of now, they have pulled out 2,15,000 crore from the Indian market.
Why Foreign Investors are pulling out their money from India
The report found that the reasons for the increased outflow of money were mainly due to uncertainty over political developments in some countries and concerns about global economic conditions. However, the main reason is rising of interest rates by RBI.
Highly Volatile ‘Indian Stock Market’
Investors are worried about their money from investing in high volatile market.
Tell you that India’s stock market is highly volatile from last few weeks. Nifty 50, benchmark index is fall down by 8% in 2022 and Nasdaq is down over 28% while S&P 500 is down 19% in this year.
This is a worrying trend, as it means that the foreign investor confidence in India is slowly deteriorating. The Indian economy is still growing, but not as fast as investors had hoped. This has caused them to pull their money out of the markets, which has led to a decline in the stock prices.
It is important for the government to try and address these concerns head on. They need to show that the Indian economy is stable and that they are doing everything they can to help improve investor confidence.
Related: Inflation expected to start softening by July 2022: PHDCCI