New Delhi: Overseas investors pulled out a massive 21,000 crore ($3 billion) from the capital markets in September, making it the steepest outflow in four months, on widening current account deficit amid global trade tensions.

The latest withdrawal comes following a net infusion of close to 5,200 crore in the capital markets (both equity and debt) last month and 2,300 crore in July.

Prior to that, overseas investors had pulled out over 61,000 crore during April-June. According to the latest depository data, foreign portfolio investors (FPIs) withdrew a net sum of 10,825 crore from equities in September and 10,198 crore from the debt market, taking the total to 21,023 crore ($3 billion). This was the highest outflow since May, when FPIs had pulled out 29,775 crore. FPIs never fully returned to the Indian equity markets after pulling out net assets worth 61,000 crore during the quarter ended June 2018.

Although they net bought assets to the tune of 7,500 crore cumulatively in July and August, the quantum of inflows was much lower than what was seen in the past when they invested with full conviction. This indicates that there has been a fair bit of uncertainty and cautiousness among FPIs investing in the Indian equity markets in the recent times, experts said.