Foreign investors have pulled out a massive Rs 5,600 crore from the Indian capital markets in the last five trading sessions, after putting in money during the previous two months, on unabated fall in rupee and rise in crude oil prices.

The latest outflow comes following a net infusion of close to Rs 5,200 crore in the capital markets, both equity and debt, last month and Rs 2,300 crore in August. Prior to that, overseas investors had pulled out over Rs 61,000 crore during April-June.

According to the latest depository data, foreign portfolio investors (FPIs) withdrew a net sum of Rs 1,021 crore from equities during September 3-7 and a net amount of Rs 4,628 crore from the debt market, taking the total to Rs 5,649 crore. Market analysts attributed the latest outflow to the fall in the rupee, rise in crude oil prices, concerns over markets regulator SEBI’s FPI circular and weakness in global markets.

Foreign investors lobby group Asset Managers Roundtable of India (AMRI) last week said that USD 75 billion will flow out of India if SEBI implements its proposed norms on KYC and beneficial ownership. However, the markets regulator brushed aside the concerns and termed the claim as “preposterous and highly irresponsible”.

According to Himanshu Srivastava, Senior Research Analyst at Morningstar, there is a fair bit of uncertainty and cautiousness among FPIs at the moment. “The focus of FPIs would be on their sustainability over the long-term,” he said.

Overall, so far this year, FPIs have pulled out over Rs 3,400 crore from equities and more than Rs 42,600 crore from the debt markets.

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