FPI holdings in FAR G-Secs fall Rs 4,634cr

Mumbai: Foreign portfolio investors’ (FPI) bets in Fully Accessible Route (FAR) government securities have declined by about Rs 4,634 crore since the start of the Middle East conflict, reflecting growing caution among overseas investors amid rising crude oil prices, a weakening rupee and rising bond yields.

Data from the Clearing Corporation of India Ltd (CCIL) showed that total FPI investment in FAR securities stood at about Rs 3.26 lakh crore on Tuesday, down from Rs 3.31 lakh crore on February 27, before the conflict began. The selling pressure has emerged as global markets reacted sharply to escalating tensions in the Middle East, which have triggered a spike in crude oil prices and volatility in emerging market assets.

Brent crude prices have surged past $100 per barrel and were trading around $108 per barrel, raising concerns about inflationary pressures and India’s external balance.

At the same time, the rupee weakened sharply to below 92 against the US dollar, while the benchmark 10-year government bond yield rose to 6.7532 per cent. Market participants said the combination of higher oil prices and currency depreciation has made foreign investors more cautious towards Indian sovereign debt.