FPIs Withdraw ₹21,000 Crore from Indian Equities Amid West Asia Conflict

Foreign portfolio investors turned net sellers in Indian equities over the past few sessions, pulling out significant capital as geopolitical tensions in West Asia weighed on global investor sentiment. 

FPI Outflows Accelerate in Early March 

As per PTI reports, Foreign portfolio investors withdrew nearly ₹21,000 crore, equivalent to about $2.3 billion, from Indian equities in the cash market during the 4 trading sessions between March 2 and March 6. March 3 was a market holiday on account of Holi. 

The latest selling pressure follows a strong inflow phase in February, when FPIs invested ₹22,615 crore into Indian equities, marking the highest monthly inflow recorded in the last 17 months. 

Geopolitical Tensions and Oil Prices Impact Sentiment 

Market participants attribute the sudden reversal in flows to escalating geopolitical tensions after the US and Israel launched an attack on Iran on February 28, reportedly resulting in the death of Iran's Supreme Leader Ayatollah Ali Khamenei and intensifying regional conflict. 

Additional pressures include the rupee weakening beyond the ₹92 per dollar mark and elevated US Treasury yields that are drawing capital towards safer global assets.  

Read More: Foreign Investors Sell ₹17,000 Crore of Indian IT Stocks in February Amid AI Disruption Concerns! 

Conclusion 

Despite recent FPI selling, domestic institutional investors and steady mutual fund SIP inflows have continued to provide support to the Indian equity market. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.