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Foreign institutional investors (FIIs) have pulled out a net Rs 1.14 lakh crore from the Indian equities in the year till date. However, the outflows slowed down in March, with FIIs selling equities worth Rs 1,084 crore in the month,suggest SEBI data.

The outflows from the segment slowed down in March, with FIIs selling equities worth Rs 1,084 crore in the month,suggest SEBI data.

Earlier this year, the FIIs pulled out a record Rs 80,000 crore from the Indian equities in January amid a bleak macroeconomic outlook and elevated inflation.

However, the outflows reduced drastically in the subsequent months. In February, FIIs sold equities worth Rs 10,068 crore, whereas in January, the outflows stood at Rs 79,962 crore.

Further, the inflows into the debt securities rose to Rs 16,438 crore in March,down from Rs 14,780 crore in the previous month and outflows of Rs 5,030 crore a year ago.

Overall, FIIs registered a net outflow of Rs 97,562 crore from the Indian capital markets in March,compared with a net outflow of Rs 79,962 crore in the year-ago period.

The outflows from the equities may be attributed to the fact that the macroeconomic outlook has deteriorated in recent months,suggesting that the recovery in the economy may not be as swift as anticipated. Moreover, the food inflation remained elevated in February,suggesting that the sticky inflation may continue to exert pressure on the interest rates in the coming months.

Further, the minutes of the Monetary Policy Committee (MPC) meeting, released on Wednesday, showed that members voted to keep the benchmark lending rate unchanged at 6.5 percent for the third consecutive time at the MPC's meeting earlier this month.

However, MPC members noted that the near-term outlook for inflation had deteriorated from the last meeting in December and that the food inflation remained a concern.

The sticky inflation may keep the door open for another rate hike in the near term.

The MPC members also observed that the growth momentum in the economy had moderated in the last quarter of 2024 and that the private consumption demand had remained weak.

Moreover, the MPC members noted that the external environment remained unstable and that the global growth outlook had weakened further in recent months.

The MPC members' comments suggest that the central bank may remain focused on curbing inflation in the coming months,even as the growth momentum in the economy had moderated.

The sticky inflation and weak growth are expected to keep the MPC members on their toes in the coming meetings as they juggle between curbing inflation and boosting growth.

The MPC members' comments also highlight the challenges facing the Indian economy. The economy is recovering from the pandemic-induced recession,but the growth momentum has slowed down in recent months.

The MPC members' comments suggest that the central bank is mindful of the slowdown in the growth momentum and that it is prepared to take action to support the economy if needed.

The MPC members' comments also suggest that the central bank is concerned about the external environment and that it is prepared to take action to mitigate any risks to the Indian economy.