Foreign investors pulled out more than USD 3 billion of the so-called 'hot money' from the Indian capital markets in 2016, making it the worst period in last eight years in terms of foreign investments.
RBI said the existing requirement of investments being made in G-sec, including state development loans with a minimum residual maturity of three years will continue.
Equities may not get affected too much even if the US Federal Reserve decides to announce USD 10 billion first cut in asset purchases because the markets here have factored in a much bigger taper than USD 10-15 billion
Domestic institutions continue to book profits even as foreign funds have been consistent buyers since the beginning of this calendar. It is not clear what is prompting the local players to cash out: unsustainable valuations or redemption pressures?