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Below the Quote on FPI flows from Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited

“There are indications of FPI flows again turning negative after the positive flows in July and August. NSDL data up to 12th September shows FPI outflows of Rs 14474 crores via  selling through the exchanges. However, the trend of FPI investment through the primary market has been continuing in September also as per early indications. FPI investment through the primary market up to 12th September stood at Rs 1336 crores taking the total investment through the primary market this year to Rs 47183 crores.

This partly explains the ongoing boom in the primary market despite the tepid performance of the secondary market. 
Going forward, FPI flows will be significantly influenced by the Iran-US conflict and the consequent impact on crude prices. Elevated crude prices ( Brent is above $108) and higher inflation implies tighter monetary policy, which means bond yields will rise further. If the US 10-year inches up to 5%, there can be a sharp correction in equity markets globally. In such a scenario, FPIs may turn sellers and move money to high yielding bonds.”

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