New Delhi : Foreign investors have pulled out over Rs 5,100 crore from the Indian capital market so far this month over concerns regarding “lower prospects” of economic growth as compared to other emerging markets.

The latest FPI outflow followed withdrawal of close to Rs 77,000 crore on net basis from equity and debts together in last three months (October-December). Prior to that, FPIs had invested over Rs 20,000 crore in the capital markets.

“FPI outflow for this month (January) may be attributed to relative lower prospects of growth in the Indian economy as compared to other emerging markets as well as developed countries,” Bajaj Capital Group CEO and Director Anil Chopra said. Though the demonetisation decision is being praised by all economic experts, it is also being mentioned in the same breadth that benefits will accrue in medium to long term. In the near term, growth may be compromised due to limited liquidity in the hands of consumers and the slump in the key sectors like automobile and real estate,” he added.

Net withdrawal by FPIs from equities stood at Rs 3,255 crore this month (till January 20), while they pulled out a net Rs 1,890 crore from the debt markets, translating into a total outflow of Rs 5,145 crore (USD 754 million), depositories’ data showed.

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