By Aditya Raghunath
Investing.com -- Foreign institutional investors (FIIs) have continued to pull out money from India in the first 10 days of May, after April where they net sold Rs 12,039.43 crore.
Market experts say that the pullback by FIIs is consistent with the sharp rise in COVID-19 cases in India as the second wave has caused multiple states to impose lockdowns and curfews, and has hampered economic activity.
FIIs had been net buyers to the tune of Rs 52,270.49 crores in the first three months of 2021. Experts have said that if COVID-19 fears persist, FIIs could continue to sell.
Nirali Shah, Head of Equity Research, Samco Securities, said in an interview to Moneycontrol.com, “Just like April, markets can remain in a tight range in May with FIIs and DIIs taking an opposite stance and keeping indices afloat. But, any escalation in the COVID condition can take markets by surprise and lead to further correction from the short-term support levels.”
However, domestic institutional investors (DIIs) have continued to buy even as FIIs sell. In May so far, DIIs have been net buyers to the tune of Rs 1,658.97 crore. In April, they bought 11,359.88 crore.
India’s biggest challenges with respect to COVID are to contain the spread of infections and increase the vaccination rate. India has one of the lowest vaccination rates among large economies.
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