Foreign portfolio investors pulled out around Rs 7,712 crore from Indian equities in this month so far following the 'super-rich' tax announced in the budget for 2019-20, according to analysts.
FPIs had been net investors in the equity segment in the previous five months.
According to the latest data available with depositories, a net sum of Rs 7,712 crore has been pulled out from equities during July 1-19. However, foreign portfolio investors pumped in Rs 9,371.12 crore in the debt segment during the period.
This has translated into a net investment of around Rs 1,659 crore in July so far into the capital markets—both equity and debt.
"FPIs have been on a selling spree ever since government proposed 'super-rich' tax in its budget and with no respite in sight from the government, the quantum of net outflows shot up," said Himanshu Srivastava, senior analyst manager research at Morningstar.
Besides, other factors which are keeping foreign investors at bay from investing in Indian markets are a tepid earning season, slower pace of GDP growth, sub-par monsoon and lowering of India's growth forecast from Asian Development Bank, he said.
He further added that from an investment perspective, the current scenario is clearly "unfavourable" for FPIs to invest in Indian equities.
Also, global factors such as tensions between U.S. and Iran kept investor sentiments “jittery”, said Harsh Jain, chief operating officer at Groww. “While within India, quarterly results of a few companies also failed to meet the street's expectations."
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