Foreign investors offload Rs 3,500 crore

Mumbai: The severe risk aversion caused in global markets amidst growing concerns regarding the China-led global slowdown has led to overseas investors pulling out Rs 3,500 crore from the domestic equities during the first two weeks of this calendar year.

This is the first time in last five years that foreign portfolio investors (FPI) have turned net sellers of equities during the beginning of the year.

While the key benchmark equity indices have witnessed a steep fall during this period, overseas investors are facing a double whammy due to a sharp depreciation in rupee against the dollar. This has led to foreign investors suffering higher losses as against their domestic counterparts.

The BSE Dollex-30 index, the dollar-linked counterpart of the Sensex that measures the index movement after taking into account the rupee-dollar exchange rate, has slumped 8.40 per cent in 2016 till date as compared to a 6.36 per cent fall in BSE Sensex.

“What we are seeing is a knee-jerk reaction to the negative news flow from overseas markets which has triggered widespread volatility in global financial markets. We can expect further selling by global portfolio investors for another months or so. However, it will not alter India’s fundamental story since we are among a handful of economies which are growing at a decent rate and investors searching for good opportunities will not be able to ignore India from a medium to long-term perspective,” said Ambareesh Baliga, senior research analyst.