Overseas investors pulled out more than Rs 11,000 crore from the Indian stock markets in January -- the highest net outflow in five months -- on global growth worries and decline in oil prices.
However, these investors continue to remain bullish on the Indian debt market and invested a net amount of Rs 2,313 crore during the period.
According to a data available with depositories, Foreign Portfolio Investors (FPIs) infused a gross amount of Rs 70,742 crore into equity markets, while pulling out Rs 81,868 crore during the same period, resulting in a net outflow of Rs 11,126 crore ($1.65 billion).
This is the highest net outflow since August last year, when foreign investors had taken out Rs 16,877 crore from the stock markets.
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 Indian stock markets.
Market experts attributed the outflow to several negative factors such as crude oil price slipping below $28 per barrel this month. Currently, the price is around $35 per barrel.
The investor sentiment is also rattled by depreciating rupee and concerns over health of the Chinese economy, said Vinod Nair, head of Fundamental Research of Geojit BNP Paribas Financial.
In 2015, FPIs had infused a net amount of Rs 17,806 crore in equities and Rs 45,856 crore in bond markets.