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By: ENS Economic Bureau|Mumbai |
Released: March 5, 2020 3: 36: 47 am
According to NSDL information, foreign portfolio financiers (FPIs), who have now embraced a ‘risk-off’ approach, pulled out Rs 11,863 crore from India in three sessions with Rs 5,970 crore heading out from the equity market and Rs 5,834 crore from the financial obligation market. (File Picture)
The sell-off in the stock exchange driven by the global impact of coronavirus has actually caused foreign portfolio outflows of over Rs 11,000 crore in last 3 sessions, putting the rupee under pressure.
The rupee struck a low of 73.63 on Wednesday however recuperated to close at 73.39 against the dollar even as the US Federal Reserve slashed its policy rate by 50 basis points. “If the FPI withdrawal continues, the rupee will continue to be under pressure and touch even 74-75 versus the dollar if the RBI doesn’t step in aggressively in the Forex (Click Here For Best Forex Techniques) market. Markets anticipate the reserve bank to action in and sell dollars to prevent substantial losses in the local system,” stated an expert with a research company.
According to NSDL data, foreign portfolio investors (FPIs), who have actually now adopted a ‘risk-off’ method, pulled out Rs 11,863 crore from India in 3 sessions with Rs 5,970 crore going out from the equity market and Rs 5,834 crore from the debt market. When the Sensex plunged 1,448 points on February 28, FPIs withdrew over Rs 3,300 crore from the market.
FPIs had invested around Rs 1 lakh crore in the equity market in calendar 2019 with the month of March 2019 experiencing the optimum inflow of Rs 33,981 crore. However, in the January-March period of 2020, there was a net outflow of Rs 1,936 crore with FPIs pulling out Rs 15,385 crore from the debt market and investing Rs 7,973 crore in equity and Rs 5,477 crore in hybrid and debt-VRR.
” The BSE Sensex plunged 6 percent while the Nifty 50 was down 6.3 percent in the month of February making it among the worst month-to-month fall since September2018 The big fall was in the background of COVID-19 infections emerging in Europe, the Americas and the World Health Organizations’ (WHO) cautions of possibility of an international pandemic This worry combined with the reality that markets had already run-up, has likewise triggered a ‘risk-off’ mindset among foreign institutional investors who have emerged as net sellers,” stated a report from HDFC Securities.
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