This comes following an eight-month high inflow of Rs 19,728 crore in November, mainly on account of the government's plan to recapitalise PSU banks and surge in India's ranking on the World Bank's ease of doing business list.
This also marked the highest net investment by FPIs since March, when they had poured in Rs 30,906 crore in the equity markets.
According to the depositories data, Foreign Portfolio Investors (FPIs) withdrew a net amount of Rs 7,300 crore (USD 1.14 billion) from equities during December 1-22.
However, such investors put in Rs 1,356 crore in the debt markets during the period under review.
"Rising crude prices and widening fiscal deficit have prompted them to adopt a cautious stance. In addition to that, appreciating rupee and rising domestic markets too provide a good profit booking opportunity to them, especially before Christmas and New Year," said Morningstar India's Senior Analyst Manager (Research) Himanshu Srivastava.
As per recently released data, India's fiscal deficit rose to 96.1 per cent of the full-year target by the end of October.
The fiscal deficit data overshadowed a strong GDP growth of 6.3 per cent for September quarter.
It has been a tremendous journey for the Indian equity markets in the calendar year 2017. After taking a break from buying into Indian equities in the months of August and September and returning cautiously in October, FPIs bought Indian equities in abundance in November.
However, they have withdrawn funds in December so far.
Overall, FPIs have invested Rs 49,836 crore in equities so far in 2017 and another Rs 1.5 lakh crore in debt markets.
"Given 2019 would not be far, the expectation of some other economic reforms from the government would be high. But the major factor for FPIs going ahead would be to see growth coming back in the domestic economy, which has not yet picked up contrary to the expectation," Srivastava added.
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