Foreign Portfolio Investors have pulled out ₹7,186 crore so far in October, which is nearly 80 per cent more than what they had taken out in September. So far this year, FPIs have been net sellers in all the months except July and August. The total outflow by FPIs has reached ₹1.79 lakh crore so far in 2022.

FPIs turned net buyers in July after nine straight months of net outflows, which started in October last year. Between October 2021 till June 2022, they sold ₹2.46-lakh crore in the Indian equity markets.

Foreign investors have been slowing down their equity buying in India since September. The scenario turned adverse after a hotter-than-expected inflation report dashed hopes that the US Fed would scale down its rate hikes in the coming months. Stock markets in the US have been in a tailspin ever since Federal Reserve Chairman Jerome Powell gave the most aggressive speech since the operation twist (quantitative easing) era speech of the Fed chairman in 2009.

Fed aggressive interest rate hikes mean tightening of dollar liquidity, the abundance of which is known to drive the equity markets. It is a key reason for FPIs to have built short positions on Indian markets, which have outperformed the world and declined the least this year in the aftermath of Russia-Ukraine conflict.

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