Foreign portfolio investors (FPIs) pumped in a net of just Rs 986 crore in Indian equities during August, as cautiousness continued to persist among overseas investors.
According to data from depositories, FPIs bought equities worth Rs 986 crore and invested Rs 13,494 crore in the debt segment between August 2-27.
This translated into a total net investment of Rs 14,480 crore.
In July, they were net sellers at Rs 7,273 crore.
"The trend of foreign flows into the Indian equity markets have not been encouraging ever since US Fed indicated tightening of its monetary policy stance earlier than what was initially projected," said Himanshu Srivastava, associate director (manager research), Morningstar India.
There is cautiousness among FPIs towards investing in Indian equity markets despite signs of economic recovery, relaxations in lockdowns across various states, opening up of businesses, pick-up in vaccination drive, market touching all-time highs and regulatory clampdowns in China denting its growth outlook, he added.
Other than India, all other emerging markets witnessed positive inflows, noted Shrikant Chouhan, executive vice-president (equity technical research) at Kotak Securities.
Taiwan, Korea, Indonesia and Philippines reported inflows of $184 million, $166 million, $125 million and $23 million, respectively.
"FPI, going forward, is likely to be influenced by the US Fed commentary expected tonight. A hawkish Fed may rattle markets. Any way, they are unlikely to commit big fresh money at these stretched valuations," said V K Vijayakumar, chief investment strategist at Geojit Financial Services.