New Delhi: Overseas investors have pulled out a net Rs 1,14,855.97 crore from the Indian markets in the current year so far, amid heightened geopolitical tensions and inflation concerns.

Foreign portfolio investors have sold domestic equities worth Rs 48,261.65 crore far this month, taking the year-to-date tally this year to a massive Rs 1,14,855.97 crore, to depositories data. according to depositories

The exodus of foreign investors was s was largely owing to inflationary pressure and deepening global macroeconomic conditions following the Russia-Ukraine war, experts said.

This is for the sixth straight month that foreign institutional investors have offloaded their holdings on a net basis in the Indian equity market.

Foreign portfolio investors (FPIs) fear that India would be impacted more by commodity price likes, particularly in crude oil, since India is a major importer.

While the Russia-Ukraine war has limited the direct impact on the Indian economy, given our lower dependence on imports from these countries, higher commodities inflation poses a key risk of macro both in terms of parameters such as the balance of payments and action as well as inflation as corporate earnings estimates on account of higher input costs," said Shibani Kurian, Senior EVP & Head- Equity Research, Kotak Mahindra Asset Management Company.

India is a net importer of India and it is estimated crude oil, crude and that every 10 percent increase in crude oil prices impacts the current account deficit by around 30 bps and CPI inflation by around 40 bps, and GDP by around 20 bps, all else remaining constant.

"However, unlike this time around there are a few offsets from a domestic standpoint, which includes high forex reserves, strong FDI flows, and improvement in export growth," Kurian noted.

As per depositories data, foreign investors pulled out Rs 28,526.30 crore from Indian equities in January, Rs 38,068.02 crore in February, and Rs 48,261.65 crore in March so far.

"The Indian equity markets continue to be in a grind, influenced by and reacting to incremental news flow on the global front, especially related to the geopolitical situation and Fed Rhetoric. The two key challenges and monitorable for the markets in the near term are the persistent inflationary pressures and the rising bond yields," said Milind Muchhala, Executive Director, Julius Baer.

While the inflationary pressures have been building up over the past few months, the geopolitical situation has worsened the situation, as Ukraine and Russia are large players in energy and players in un several commodities, and the prices of several of these have spiked up since the beginning of the crisis, Muchhala added.-PTI