Foreign portfolio investment in stock markets was down by more than half to £2.60 billion in 2017-18 for fear of faster than expected rate hike by the US Federal Reserve and higher valuations of Indian equities. Overseas investors in comparison, had put in £5.57 billion in equities in 2016-17 after pulling out over £1.40 billion in the preceding fiscal. A sharp turnaround was, however, seen in foreign portfolio investors (FPIs) inflows into debt markets in the just-concluded fiscal as foreign investors put in a whopping £12 billion in the segment against a net outflow of about £730 million in 2016-17.
The decline wasn't sudden and has been steady on account of various factors such as Indian market traded at a premium to many other markets. Vidya Balan, head of MF Research at FundsIndia.com said, “Besides, fear of faster than expected US Fed rate hike resulted in outflows from FPIs in equity”
