How has been the FPI selling in the month of February so far?

Foreign portfolio investors pulled out more than Rs.9,500 crore from Indian markets in the first 7 trading sessions of February 2022. The FPI selling has almost been relentless through the last few days. It may be recollected that in the month of Jan-22, FPIs had been net sellers in equities to the tune of $4.46 billion while they have sold a total of $10 billion in equities in the last 4 months since the start of October.

There have been a number of triggers for FPIs to sell aggressively. The end of ultra-loose monetary policies in the US has raised the fear of risk-off outflows from India and other EMs. In addition, the rising input inflation challenge in India has also led FPIs to exit India in droves. Interestingly, FPIs have been buying in other Asian markets. However, domestic institutions have been net buyers in this period.