Foreign Portfolio Investors (FPIs) have reduced their exposure to Indian equities during the first half of March, with notable selling in financial stocks. The shift comes after a period of inflows in February and reflects changing global conditions, including geopolitical developments and currency movements. The trend indicates a reassessment of sectoral allocations by overseas investors.
Financial services emerged as the most impacted sector during the first half of March. FPIs sold stocks worth over ₹31,800 crore between March 1 and 15, marking a reversal from net buying seen in February, as per a new report by Mint.
This selling led to a decline in total FPI investment in the sector, indicating reduced exposure to rate-sensitive financial stocks amid evolving macroeconomic conditions.
Total FPI outflows from Indian equities reached approximately ₹52,700 crore during the first fortnight of March. The selling trend continued beyond this period, with cumulative outflows rising further by mid-month.
This follows a period in February when FPIs had turned net buyers, bringing in over ₹22,000 crore and ending a multi-month outflow streak.
The shift in FPI activity is linked to a combination of global and domestic factors. Geopolitical tensions, particularly involving the United States and Iran, have contributed to uncertainty in global markets.
At the same time, rising crude oil prices have put pressure on the Indian rupee, influencing foreign investor sentiment and prompting capital outflows from emerging markets like India.
Apart from financial services, several other sectors recorded notable FPI selling during the period:
Additionally, sectors such as consumer durables, construction materials and information technology also saw outflows exceeding ₹1,000 crore each.
Despite the broader outflows, some sectors recorded selective inflows. Capital goods attracted the highest inflows during the period, indicating investor interest in industrial and infrastructure-linked segments.
Other sectors that saw moderate inflows included metals and mining, consumer services, power, and chemicals. These trends suggest a gradual shift towards cyclical and production-oriented sectors.
The overall pattern indicates a repositioning by FPIs, with reduced allocation to rate-sensitive and consumption-driven sectors. At the same time, there appears to be selective interest in sectors linked to capital expenditure and industrial activity.
This shift may reflect a cautious approach as investors respond to external uncertainties and domestic economic signals.
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FPI activity in March highlights a change in investment patterns, with significant outflows from financial and consumption-linked sectors. While broader market sentiment remains influenced by global developments, selective inflows into industrial segments suggest a gradual rebalancing of portfolios rather than a uniform withdrawal from Indian equities.
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 or 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 related documents carefully before investing.
Published on: Mar 19, 2026, 12:35 PM IST
Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
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