FPIs withdraw Rs 22,194 crore in January amid weak earnings outlook, rising dollar

NEW DELHI: Foreign investors have withdrawn Rs 22,194 crore from Indian equities this month, driven by expectations of a weak earnings season, a steady rise in the US dollar, and concerns over the tariff war during Donald Trump’s presidency.

This came following an investment of Rs 15,446 crore in the month of December, data with the depositories showed. Foreign investors have scaled back their investments in Indian equities significantly amid global and domestic headwinds.

“This exodus of foreign money from the Indian markets could be attributed to a multitude of factors, such as expectation of yet another weak earning season, concerns over the tariff war under Trump’s presidency, slowdown in GDP growth, still high inflation numbers and uncertainty over the commencement of the interest cut in India,” Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, said.

Additionally, the record-low level of the Indian rupee, surge in US bond yields, coupled with rich valuation of Indian markets also makes Indian equities relatively unattractive for foreign investors.