The Indian stock market suffered its worst-ever sell-off by foreign institutional investors (FII) in 2022 amid a shaky global economic situation.
FIIs have sold $16.5 billion (Rs 1.2 trillion) worth of Indian stocks this year, equivalent to average daily outflows of about $68 million, according to data from the National Securities Depository of India Limited (NSDL). This is worse than what happened during the global financial crisis in 2008, when FIIs withdrew about $12 billion from Indian equities.
The Federal Reserve This year's interest rate hikes - the most aggressive in four decades - reversed the flow of money into the stock market. Instead, FIIs put their money into bonds . Most of the foreign money leaving Indian equities as of November came from the financial and IT sectors, both of which have high FII ownership. FIIs have sold financial sector stocks worth $8.42 billion and IT stocks worth $8.83 billion so far, according to NSDL data.
Analyst expects foreign investors to return sporadically in early 2023 and become more stable in the second half of the year as China's economy reopens and the global macroeconomic environment improves.
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