Foreign portfolio investors (FPIs) withdrew about Rs 40,000 crore from the Indian equity market in May, continuing their hefty selling spree for the eighth month in a row, fearful of an aggressive rate hike by the US Federal Reserve, which would impact investor confidence. According to data from depositories, net outflows from stocks by FPIs have reached Rs 1.69 lakh billion so far in 2022.

FPI flows in emerging markets will continue turbulent in the future due to increased geopolitical risk, rising inflation, and central bank tightening, among other factors, according to Shrikant Chouhan, Head Of Equity Research (Retail), Kotak Securities.

Foreign investors withdrew a net amount of Rs 39,993 crore from stocks in May, according to the statistics. The major cause of the Indian market's deterioration is this enormous outflow.

The US Federal Reserve has raised interest rates twice this year to combat rising inflation caused by supply chain disruptions caused by the conflict between Russia and Ukraine.

In the last eight months (from October 2021 to May 2022), foreign investors have withdrawn a whopping net amount of Rs 2.07 lakh crore from equities.

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