Foreign investors turned sellers again in September and pulled out over Rs 7,600 crore from the Indian equity markets amid a hawkish stance by the US Fed and sharp depreciation in the rupee.

With this, the total outflow by Foreign Portfolio Investors (FPIs) from the Indian equity markets has reached Rs 1.68 lakh crore so far in 2022, data with depositories showed.

FPI flows are expected to remain volatile in the coming months on a slew of global and domestic factors, experts said. “The UK government’s expansionary fiscal policies amid elevated global inflation roiled the global currency markets and resulted in risk-off sentiment in equities,” said Shrikant Chouhan, head of equity research (Retail), Kotak Securities. On the domestic front, there are some fuel-related concerns, besides a marginal drop in GDP estimates, he added.

According to the data, FPIs sold equities worth a net Rs 7,624 crore in September. This came following a net investment of Rs 51,200 crore in August and nearly Rs 5,000 crore in July.

Prior to that, FPIs were net sellers in Indian equity markets for nine months in a row beginning October 2021. Although FPIs started the month of September on a positive note, the pace of net flows was lower compared to August on the back of enhanced global uncertainty.

“Concerns over the aggressive rate hike by US Fed to control rising inflation, the sharp depreciation in rupee, the surge in US bond yields and fear of a global recession, fuelled pessimism among investors. Apart from India, FPI flow was negative for the Philippines, South Korea, Taiwan, and Thailand, while it was positive for Indonesia during the period under review.