How has been the FII action in the month of February 2022 so far?

Foreign portfolio investors have pulled out a total sum of Rs.18,856 crore from Indian markets from equity and debt combined in the first 3 weeks of Feb-22. This was largely along expected lines amidst rising geopolitical tensions and an extremely likely Fed rate hike in Mar-22 to the tune of 50 basis points. FPIs sold Rs.15,342 crore in equities and Rs.3,629 crore in the bond markets, although they were marginal buyers in the hybrids space.

Till date, February marks the fifth consecutive month of foreign fund outflows from Indian markets, in contrast to other EMs that are seeing positive flows into markets. Geopolitical tensions in Ukraine have triggered a risk-off rush among global investors. In addition, the possibility of the Fed front-ending rate hikes by 50 bps in Mar-22 has raised rate gap concerns among investors. In last 1 year, FPIs pulled out $8 billion, worst since year 2009.