New Delhi: Foreign investors withdrew a substantial Rs 17,000 crore from Indian equities during the initial ten days of this month, attributed to uncertainties surrounding the general election outcome, expensive market valuations, and profit-taking. This outflow starkly contrasted with the net withdrawal of Rs 8,700 crore seen for the entire month of April, primarily due to concerns over changes in India’s tax treaty with Mauritius and a sustained uptick in US bond yields.Before that, Foreign Portfolio Investors (FPIs) made a net investment of Rs 35,098 crore in March and Rs 1,539 crore in February. Looking ahead, post-general elections, corporate India’s strong financial performance in Q4 FY24 is anticipated to be rewarded, PTI reported.However, until the election outcome is clear, FPIs might maintain a cautious stance. Yet, if the results prove favourable and political stability is established, a significant return of FPIs could be expected, Trivesh D, COO at Tradejini told the news agency.According to depository data, FPIs experienced a net equity outflow of Rs 17,083 crore this month until May 10, driven by several factors including the ongoing election uncertainty and high market valuations prompting profit-taking.The current political ambiguity in India, coupled with attractive US interest rates, has prompted FPIs to adopt a risk-averse approach, said Krishna Appala, smallcase manager and senior research analyst at Capitalmind. Additionally, profit booking ahead of a potential market correction, especially around results day, may have prompted this move, observed Trivesh of Tradejini.Globally, the US Federal Reserve’s indication of no rate cuts until inflation subsides has heightened scepticism regarding an early rate cut. This led to a surge in US Treasury yields and an appreciation of the US dollar. Meanwhile, FPIs withdrew Rs 1,602 crore from the debt market during this period.Before this outflow, foreign investors injected Rs 13,602 crore in March, Rs 22,419 crore in February, Rs 19,836 crore in January. This inflow was driven by the upcoming inclusion of Indian government bonds in the JP Morgan Index. JP Morgan Chase & Co in September last year announced it will add Indian government bonds to its benchmark emerging market index from June 2024.This landmark inclusion is anticipated to benefit India by attracting around $20-40 billion in the subsequent 18 to 24 months, the report added.In 2024 so far, FPIs have remained net sellers in equities, withdrawing Rs 14,860 crore, while investing Rs 14,307 crore in the debt market.Domestic institutional investors, or DIIs, conversely, have consistently remained buyers, with cumulative DII buying amounting to Rs 19,410 crore this month, V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told PTI.