The tax impact of FPIs arises from the capital gains tax rules and grandfathering provision, introduced in 2018, that brought back long-term capital gains (LTCG) tax on listed equities.
So far in February, FPI flows were negative across major emerging markets, barring the Philippines and Thailand.
There has been a mixed trend with respect to FPI flows following the budget announcement on increase in capital gains tax on equity investments.
On the equities front, FPIs pulled out Rs 424 crore so far this month, sharply down from Rs 25,744 crore in January
According to the data, Foreign Portfolio Investors (FPIs) pulled out a net sum of Rs 3,776 crore from the Indian equities this month (till February 16). This came following a net withdrawal of Rs 25,743 crore in January
Suri also said he’s closely tracking defense and railways sector stocks. He said that defense order inflows are strong, and that the execution is in progress.
Apart from equities, FPIs invested Rs 643 crore in the country's debt market during the period under review. With this, the total investment by FPIs in equity has reached Rs 1.31 lakh crore and close to Rs 28,825 crore in the debt market this year, so far.
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The outflow in January came after a net inflow of Rs 11,119 crore in December and Rs 36,239 crore in November.
Indian equities are growing 7 per cent year on year return while comparatively the US markets are down 14 per cent.
As per depositories data, overseas investors took out Rs 15,342 crore from equities and Rs 3,629 crore from the bonds market between February 1-18.
With positive flows in equity schemes in the past couple of months, mutual funds have turned saviour for equity markets as they are seen absorbing the selling by FPIs
Neither the outbreak of COVID-19 nor the dire state of economy has deterred investors’ enthusiasm for equity mutual funds
Net inflows into equity schemes increased to Rs 8,092 crore in July
CNBC-TV18‘s Latha Venkatesh decodes the impact of the tighter P-Note norms on the market.