Foreign portfolio investors (FPIs) have withdrawn a net Rs 929 crore from Indian markets so far this month amid concerns over rising COVID-19 cases denting the economic recovery.

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The reversal of buying trend came after FPIs invested Rs 17,304 crore in March, Rs 23,663 crore in February and Rs 14,649 crore in January.

According to the depositories data, overseas investors pulled out Rs 740 crore from equities and Rs 189 crore from the debt segment, taking the total net withdrawal between April 1-9 to Rs 929 crore.

Rusmik Oza, executive vice president, head of fundamental research at Kotak Securities, said FPI outflows came on the back of rising Covid cases and a sharper depreciation in the Indian rupee compared with USD.

"In the monetary policy meeting, there was the surprise announcement of G-Sec buying of Rs 1 lakh cr by RBI in Q1FY22. The assurance of G-Sec buying has led to a significant depreciation in INR, which has moved from 72.4 to 74.8," he said.

He further noted that other emerging markets have slowly started getting FPI flows in a "miniscule way".

South Korea and Taiwan are leading the inflows into emerging markets for this month to date, Oza said.

A strong year-on-year increase in the fourth-quarter earnings season is expected across all sectors with high growth in automobiles, banks, metals, mining and oil and gas industries, Oza said.

The likely strong earnings growth could restrict any major downside in the market going ahead. It is going to be a mixed reaction from FPIs in the near term.

"FPI inflows are likely to remain muted, going forward, till clarity emerges on the impact of the second wave," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Pharmaceuticals and IT are likely to attract more investment in the coming days, he mentioned.