Foreign Institutional Investors (REITs) continue to take money out of the Indian stock market. The liquidation of REITs amid market volatility and global economic challenges has soured stock market sentiment. Foreign investors have been withdrawing money from the Indian market since the beginning of 2022 and their momentum also continues in June this month.

In 2022, foreign investors have so far sold around Rs 1.81 lakh crore in the Indian stock market. However, some experts expect that in the next few days this REIT selling may seem to come to a halt.

According to data from NSDL, REITs have so far sold a net worth of Rs 13,888 crore in the Indian stock market in the month of June. Meanwhile, in May and April, it had withdrawn Rs 39,993 crore and Rs 17,144 crore respectively from the Indian market. In this way, in the first two months (April and May) of the current financial year, it withdrew a total of Rs 57,137 crore from the Indian stock market. This selling pressure could continue in June.

After Russia invaded Ukraine, there was a huge sell-off by foreign investors in the month of March and Rs 41,243 crore was withdrawn from the Indian market that month. In March, stock markets around the world fell due to the huge jump in the prices of raw materials, crude oil, gas and other consumer products.

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Earlier in January and February, foreign investors withdrew Rs 33,303 crore and Rs 35,592 crore respectively from the Indian market. In this year 2022, REITs have so far withdrawn a total of Rs 1,81,043 crore from the Indian stock market. Apart from this, it has also withdrawn about Rs 14,055 crore from the debt or bond market so far this year.

The impact of this pullback is clearly visible in Indian equity markets and the BSE Sensex and NSE Nifty have fallen over 8% so far this year. On Friday, the Sensex fell 1,016.84 points or 1.84% to close at 54,303.44. In contrast, Nifty closed at 16,201.80, down 276.30 points or 1.68%.

When will the sale of REITs stop?

Vinod Nair, head of research at Geojit Financial Services, said: “So far, REITs have remained negative on expectations of a larger rate hike from the Federal Reserve. and Fed futures remain in line with market expectations, if so, this selloff might stop.”

“The domestic market will continue to be influenced by global trends in the time ahead and REIT sales are expected to continue in the near future. However, we expect FII sales to moderate in the short to medium term,” a- he added.

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