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- FPI Sell Off In India: ₹21,000 Cr Outflow In March 2026 Amid West Asia Crisis
Mumbai9 minutes ago
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Indian stock market is witnessing heavy selling by foreign portfolio investors (FPIs). Due to increasing tension in West Asia and worsening global risk sentiment, foreign investors have withdrawn about Rs 21,000 crore from the market in the last trading week i.e. 4 trading sessions.
This sale took place during the first week of March (2 to 6 March). The Indian market was closed on March 3 on the occasion of Holi. The special thing is that in February, FPI had invested Rs 22,615 crore in the Indian market, which was the highest in the last 17 months.
Impact of war and rising crude oil prices
According to market experts, the biggest reason for the selling is the increasing geopolitical tension in West Asia. The conflict in the region has intensified after the US-Israeli attack on Iran on February 28.
Due to the fear of supply stoppage in the Strait of Hormuz, Brent crude oil prices have crossed $ 92 per barrel. India imports most of the oil it needs. In such a situation, the cost of crude oil is being considered negative for the Indian economy.
Rupee crosses 92 level against dollar
A major reason for the selling in the market by foreign investors is the decline in the Indian rupee. Rupee has crossed the level of 92 against the dollar.
When the rupee weakens, the returns foreign investors get in dollars go down, so they move money out of emerging markets and into safer US Treasuries and dollars.
Pressure on the market due to these 4 reasons
- West Asia Crisis: After the death of Iran’s Supreme Leader, the fear of Iran-Israel war has increased.
- US Treasury Yield: Due to increasing bond yields in America, investors are withdrawing money from the risky stock market and investing it in government bonds.
- Corporate Earnings: Initial trends for the fourth quarter (Q4) of fiscal year 2026 are mixed. There is pressure on margins in the IT-consumption sector.
- Fear of inflation: Due to costlier crude oil, the risk of current account deficit (CAD) and inflation has increased in India.
Domestic investors took over the market
Despite such huge selling by foreign investors, Indian markets have not completely crashed. The reason for this is Domestic Institutional Investors (DIIs).
The Systematic Investment Plan (SIP) amount coming into mutual funds every month has supported the market. The decline in the market has been limited due to the confidence of retail investors.
Will the market fall further?
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, says that unless the geopolitical situation improves and crude oil prices come down, it is difficult for FPIs to make a comeback.
Himanshu Srivastava of Morningstar Investment Research India said that due to global uncertainty, investors are currently looking for safe assets.
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