Dollar Surge Drives Foreign Investors Away from Indian Equities

Foreign investors have withdrawn Rs 44,396 crore from Indian equities due to the strong dollar, rising US bond yields, and an expected weak earnings season. The trend indicates cautious foreign investor sentiment amid global and domestic challenges, contrasting with previous years' investment patterns.

Foreign investors have pulled out Rs 44,396 crore from Indian equities this month, influenced by the strengthening dollar, rising bond yields in the US, and expectations of a weak earnings season.

This follows a Rs 15,446 crore investment in December, according to depository data. The changing sentiment occurs amidst significant global and domestic challenges.

Himanshu Srivastava of Morningstar Investment Advisers India cited the depreciation of the rupee as a major pressure point. VK Vijayakumar of Geojit Financial Services noted that the strong dollar and high US bond yields make India, as an expensive emerging market, less attractive to FPIs.