How was the FPI action in the last week ended on 17-December?

In the first 3 weeks of December 2021, the foreign portfolio investors or FPIs pulled out a total sum of Rs.17,696 crore from the Indian capital markets. The selling was obviously driven by concerns over the Omicron variant, rapid tapering by the Fed, early rate hikes in the US, persistent inflation and a worsening Evergrande situation in China. Overall, FPIs net sold Rs.13,470 crore in equities and Rs.4,226 crore in debt taking total to Rs.17,696 crore.

However, this data may not give the whole picture. For example, the equity market selling of $1.8 billion would have been much higher had it not been for the $1.5 billion inflows into IPOs. In fact, secondary markets saw much heavier selling. Most of this was anchor IPO flows from QIBs. Needless to say, it is the over-owned banking sector that is attracting the bulk of the selling by FPIs. Surprisingly, other EMs have been seeing strong inflows.