How has the foreign portfolio selling in July so far been?

Foreign portfolio investors (FPIs) continued to stay cautious on the Indian equity markets in the previous week, although the pace of selling has come down substantially compared to June 2022. During the month of July 2022 till date, FPIs pulled out Rs7,432 crore with nearly 2 more full weeks to go. For the FPIs, the major fears are dollar strength and a likely recession in the US. All eyes will be pivoted on the Fed policy announcement towards the end of the month, where the big debate is whether rate hike will by 75 bps or 100 bps.

However, the bigger picture is that the FPI selling in July does look paltry compared to net withdrawal of Rs50,203 crore by FPIs in the month of June 2022. However, experts are of the general view that the uncertainty in the forex market would induce the FPIs to either sell or at best remain in the sidelines. For now, they are unlikely to turn aggressive buyers any time soon. The biggest ever FPI outflow was in March 2020 when the FPIs had pulled out Rs61,973 crore at the peak of the COVID pandemic related market panic.