<p>After a positive FY21 for FPIs, this financial year has been a dampener in April and May. In April and May 2021, there has been a net outflow of Rs 10,794 crore, as per NSDL data.</p>.<p>These investors have pulled out from the equity and debt spaces because of which there is a net outflow. “FIIs and FPIs outflow has been due to the second Covid-19 wave,” Akhil Chaturvedi from Motilal Oswal says. He adds that going further, corporate earnings will be a factor that will determine the course of these investments. </p>.<p>“If Q1 earnings are satisfactory then coming quarters should see the inflow of FIIs and FPIs. GDP numbers have been satisfactory and the outlook is positive,” says Chaturvedi. </p>.<p>Gaurav Garg from CapitalVia Global Research says that one of the reasons for this is rising inflation in the US. “It was expected that rates would be revised sooner than expected. Bond yields were also rising. When such a situation occurs, foreign investors tend to pull out from equity,” says Garg.</p>.<p>As per the NSDL’s fortnightly review of FPIs, financial services, capital goods, insurance are some of the sectors that witnessed a net outflow between mid-April and mid-May.</p>.<p>Citing positive global sentiments and short-term market sentiments being bullish, analysts expect the trend to be positive for FIIs and FPIs, bringing in inflows in the coming months. They caution that if the number of Covid cases starts to increase once again, then there could be a dip in such investments.</p>.<p>“FIIs and FPIs follow the markets. They are momentum traders. If markets turn bullish, FIIs and FPIs put in money. Therefore, if Covid cases increase for few days in a row, market sentiments will be low resulting in FPIs and FIIs to pull out from Indian equities,” says Garg.</p>.<p>The month of June has opened on a positive note with net inflows of Rs 4,595 crore. <br /><br /></p>
<p>After a positive FY21 for FPIs, this financial year has been a dampener in April and May. In April and May 2021, there has been a net outflow of Rs 10,794 crore, as per NSDL data.</p>.<p>These investors have pulled out from the equity and debt spaces because of which there is a net outflow. “FIIs and FPIs outflow has been due to the second Covid-19 wave,” Akhil Chaturvedi from Motilal Oswal says. He adds that going further, corporate earnings will be a factor that will determine the course of these investments. </p>.<p>“If Q1 earnings are satisfactory then coming quarters should see the inflow of FIIs and FPIs. GDP numbers have been satisfactory and the outlook is positive,” says Chaturvedi. </p>.<p>Gaurav Garg from CapitalVia Global Research says that one of the reasons for this is rising inflation in the US. “It was expected that rates would be revised sooner than expected. Bond yields were also rising. When such a situation occurs, foreign investors tend to pull out from equity,” says Garg.</p>.<p>As per the NSDL’s fortnightly review of FPIs, financial services, capital goods, insurance are some of the sectors that witnessed a net outflow between mid-April and mid-May.</p>.<p>Citing positive global sentiments and short-term market sentiments being bullish, analysts expect the trend to be positive for FIIs and FPIs, bringing in inflows in the coming months. They caution that if the number of Covid cases starts to increase once again, then there could be a dip in such investments.</p>.<p>“FIIs and FPIs follow the markets. They are momentum traders. If markets turn bullish, FIIs and FPIs put in money. Therefore, if Covid cases increase for few days in a row, market sentiments will be low resulting in FPIs and FIIs to pull out from Indian equities,” says Garg.</p>.<p>The month of June has opened on a positive note with net inflows of Rs 4,595 crore. <br /><br /></p>
