The recent outflow could be attributed to nervousness in the global market led by reduction in GDP forecast and an instability in oil prices, Geojit BNP Paribas Financial Services Head of Research Vinod Nair said.
The European Commission, last week, slashed forecast for euro zone growth on the back of a slowdown in emerging markets.
Besides, China also saw deceleration in its manufacturing activity.
The data sourced from the depositories showed that FPI withdrew a net amount of Rs 774 crore from Indian equities till May 6. Prior to that, FPIs have pumped in a staggering Rs 29,558 crore in the last two months (March-April).
Capital poured in by FPIs is often referred to as 'hot money' because of its unpredictability, although they continue to remain among the most important drivers of the Indian stock markets.
In line with outflow, the benchmark BSE Sensex plunged 378 points or 1.47 per cent in the first week of this month.
So far this year, FPIs have invested Rs 12,137 crore in equities while withdrawing Rs 170 crore in the debt market, resulting in a net inflow of Rs 11,967 crore ($1.87 billion).
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