Continuing their selling spree for the sixth straight month, the overseas investors have pulled out a net Rs 45,608 crore from Indian markets in March as of now. Foreign portfolio investors (FPIs) fear that India would be impacted more by commodity price hikes, particularly in crude oil, since India is a major importer, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Foreign portfolio investors (FPIs) fear that India would be impacted more by commodity price hikes, particularly in crude oil, since India is a major importer, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

As per depositories data, FPIs pulled out Rs 41,168 crore from equities, Rs 4,431 crore from the debt segment and Rs 9 crore from hybrid instruments, taking the total net outflow between March 2-11 to Rs 45,608 crore. This is the sixth consecutive month of FPI outflows from the Indian markets.

The selling is mainly confined to financials and IT since these segments constitute the bulk of assets under the custody of FPIs, Vijayakumar noted. "An important takeaway from FPI selling is that it is not impacting all segments. For instance, FPIs sold IT stocks worth Rs 10,984 crore in February, but in March IT is one of the best performing sectors," he added. "An important takeaway from FPI selling is that it is not impacting all segments.

Nimish Shah, Chief Investment Officer, Listed Investments, Waterfield Advisors, said the dollar has been gaining strength since August-September 2021 and the interest rates in the US have moved up now. The geopolitical crisis has also moved market flows and shifted sentiment from risk-on to risk-off, resulting in withdrawals from most emerging market economies, he pointed out.