Himanshu Srivastava, associate director - manager research, Morningstar India said "The surge in markets has been providing profit booking opportunities to them. In addition to that, many states have also been implementing fresh lockdown measure to curb rising coronavirus cases, thus fanning concerns that growth in the domestic economy could be pushed further ahead."
“Most emerging markets barring South Korea witnessed FPI outflows this week," Rusmik Oza, executive vice president, head of fundamental research at Kotak Securities stated.
"As the earnings season proceeds we could witness more volatility and higher turnover in Indian markets.
This coupled with peak valuations could lead to some kind of profit booking by FPIs. The recent appreciation in rupee could also work in favour of FPIs when they are taking out money from India," Oza added.
According to Srivastava, "globally the scenario is evolving and there are multiple factors which are dictating the direction of foreign flows. On the domestic front, the challenges with respect to rising Covid cases and recovery of economic growth remains and that will continue to be a deterrent for foreign investors." He further said the Indian financial markets will continue to witness rotational trend with respect to foreign flows. Bouts of net inflows and outflows are expected by FPIs in the Indian financial markets, depending on their changing opinion and global trends.