Foreign portfolio investors sold debt securities of around Rs 1,900 crore in February amidst escalation of cross-border tensions in the wake of Pulwama attack.
Latest data from the depositories showed that overseas players pumped in Rs 2,039 crore into equities even as they dumped debt during February 22.
In the month of January, the net FPI outflow, from both equity and debt, stood at Rs 5,360 crore. In fact, a total of Rs 1,949 crore was withdrawn during February 1-22 period. However, there was higher infusion in equities, there is a net inflow of little over Rs 98 crore for the period under review.
Himanshu Srivastava, senior analyst manager research at Morningstar Investment Adviser India, said the recent selling by FPIs "could be attributed to the increase in cross-border tensions between India and Pakistan. "For a long time, FPIs have been adopting a cautious stance towards India, and the recent developments would have further dampened the sentiments," Srivastava said.
Tensions have escalated following terror attack in Pulwama, Jammu and Kashmir that killed 40 CRPF jawans earlier this month.
According to Srivastava, it is too early to predict the flow of investments as they are guided by short-term trends and become event specific. Besides cross-border tensions, another major focus area for the FPIs would be the outcome of the general elections and they have been adopting a wait-and-watch stance in anticipation of a concrete signs of economic growth, he added.
First Published: Feb 25, 2019 6:38 AM IST
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