In the midst of the global economic recession due to the covid-19, foreign investors have withdrawn an estimated USD 26 billion from emerging Asian economies and over USD 16 billion out of India, according to a Congressional report, increasing concerns of a major economic recession in Asia, independent Congressional Research Center said in its latest report on global economic effects of Covid-19.
Foreign investors continued to flee the Indian equity space even in the month of April, though the number of net outflows dropped substantially compared to the preceding month. They sold net assets worth $904 million throughout the month.
“The sharp drop in net outflows could be attributed to India gaining prominence among foreign investors for doing well with regards to restricting the coronavirus’ belligerent buildout,” the report said.
In addition to that, measures announced periodically by the government and the RBI to revitalize the weaker economy resonated well with investors, it added.
FPIs made a strong comeback in May and turned into net buyers as they pumped in net assets worth $2.8 billion (till 12 May) in the Indian equity markets.
Further, disruptions to industrial activity in China reportedly are causing delays in shipments of computers, cell phones, toys, and medical equipment.
The factory output in China, the United States, Japan, and South Korea all declined in the first months of 2020 due to the ban over large gatherings while maintaining social distancing in order to keep away from the disease thus adversely impacting their exports.