FPIS pull ₹11,000 crore out of equities in September

NEW DELHI: Foreign investors are turning their back on Indian shares as they pulled out over Rs 11,000 crore from stocks in September due to geopolitical concerns, slowdown in corporate earnings and higher valuations.

The net outflow by foreign portfolio investors (FPIS) fol- lows withdrawal of Rs 12,770 crore from equities in August.

Prior to that, they had pumped in over Rs 62,000 crore in the past six months (February to July). According to the latest depository data, the FPIS withdrew a net Rs 11,392 crore ($1.75 billion) in September. However, they pumped in Rs 4,430 crore in debt markets during this period.

After taking into account the latest outflow, the total investment by the FPIS in equity markets stood at Rs 34,350 crore (about $5.2 billion) so far this year.

"Slowing growth in corporate earnings coupled with high valuations and strength in the US Dollar leading to weakness in the rupee might have led to selling by FPIS," Bajaj Capital Senior V-P and Head Investment Analytics Alok Aggarwala said.

Besides, India's GDP growth slowed to 5.7 per cent in the first quarter of 2017-18 amid concerns over disruption in business activity due to issues in GST implementation.

Further, corporate earnings registered a negative growth in the same quarter, pushing back recovery and heightening concerns on expensive valuation.