FPIs pull out Rs 21,000 crore amid West Asia crisis

Metro India News | NEW DELHI 

Foreign portfolio investors (FPIs) withdrew about Rs 21,000 crore from Indian equities in the last four trading sessions, spooked by escalating tensions in West Asia.

This comes after FPIs had pumped in Rs 22,615 crore into Indian equities in February, the highest monthly inflow in 17 months. Prior to that, FPIs were net sellers for three straight months, pulling out Rs 35,962 crore in January, Rs 22,611 crore in December, and Rs 3,765 crore in November.

Experts attributed the recent sell-off to the US and Israel’s major attack on Iran on February 28, which killed Iran’s Supreme Leader Ayatollah Ali Khamenei, raising fears of conflict disrupting the Strait of Hormuz. Brent crude surged above USD 90 per barrel, triggering a global risk-off sentiment.

Other factors include rupee depreciation beyond 92 per dollar, elevated US Treasury yields attracting capital to safer assets, and concerns over Q4 FY26 corporate earnings, particularly in IT and consumption sectors.

VK Vijayakumar of Geojit Investments said uncertainty over Middle East tensions, market corrections, crude price shocks, and currency depreciation have driven sustained FPI selling. Himanshu Srivastava of Morningstar India added that rising crude prices increase inflation and current account risks, further weighing on foreign investor sentiment.

Domestic investors and mutual fund SIP inflows have cushioned the market. Analysts note that FPIs are unlikely to return until geopolitical clarity emerges and crude prices ease.