FPIs withdraw ₹10,300cr from Indian equities over Trump tariffs
What's the story
In a major market shift, foreign investors have pulled out a whopping ₹10,355 crore from Indian equities in the first week of April.
The move comes in response to US President Donald Trump's announcement of reciprocal tariffs on several countries.
The decision comes amid rising global uncertainty and increased risk aversion in financial markets across the world.
Market fluctuation
FPI withdrawal follows a brief period of inflow
The latest exit by FPIs comes after a brief spell of increased inflows in March.
In March, net outflows were curbed to ₹3,973 crore due to heavy foreign inflows in the last week. It was a stark improvement from the net selling of ₹34,574 crore in February.
However, President Trump's announcement of reciprocal tariffs has thrown global markets into turmoil and triggered massive sell-offs across markets.
Market impact
Trump's tariff announcement triggers global market sell-offs
Trump's announcement of reciprocal tariffs on several countries has sparked fears of a potential trade war. This has resulted in massive sell-offs across markets worldwide.
The US stock market alone lost about $5.4 trillion in market capitalization within two days of the tariff announcement.
The uncertainty surrounding these developments has also negatively impacted the US debt and IPO markets, with corporate debt issues and IPOs being postponed over the past two days.
Expert prediction
Market expert predicts slow recovery for Indian markets
Market expert Ajay Bagga predicted that sharp foreign inflows into Indian markets are unlikely in the near future.
"We don't expect sharp inflows for now into the Indian markets till there is some semblance of order created out of the disorder unleashed by Trump Tariffs," Bagga told ANI.
He further added that sentiment recovery could take months unless major trade negotiations are concluded quickly, leading to a faster rebound.