Foreign investors pulled out around Rs 6,000 crore from the Indian debt market in May after investing huge money last month.
But foreign portfolio investors (FPIs) are bullish on the stock market as they pump in Rs 1,495 crore during the same period.
Experts attributed the outflow to weakening of the rupee. Apart from that, possible action by the US Federal Reserve has also hit investor sentiment.
“The recent rejig from debt to equity on part of FPIs indicates their strong preference for the Indian growth story. With stocks at an attractive valuation, it makes sense to enter the equity market right now,” SAS Online Chief Operating Officer (COO) Siddhant Jain was quoted as saying in a media report.
He added that FPI debt outflow is mainly in corporate bonds, which primarily could be due to bonds maturing.
The data showed FPIs have sold debt securities worth Rs 5,986 crore) till May 27.
Outflow comes after FPIs put in Rs 6,418 crore in the debt market last month.